It is absolutely true that if
all we're doing is adding more people to a broken system, then
costs will continue to skyrocket and eventually somebody
is going to be bankrupt, whether it's the federal
government, state governments, businesses, or
individual families. So we have to deal with costs,
and I haven't heard anybody disagree with that. Now, I've already
indicated some statistics, but I just want to
reemphasize these. More than a quarter of small
businesses have reported a premium increase of 20 percent
or more just last year -- 20 percent. As a consequence, a lot of small
businesses have dropped coverage altogether. Fewer than half of businesses
with fewer than 10 workers now offer coverage. By one estimate, without
health care reform, by the end of the decade
premiums for businesses would more than double in most states. And the total cost per employee
is expected to rise to more than $28,000. So you can imagine what
that does to hiring, what that means for incomes,
and you can imagine how many families are going to be
unable to afford insurance. As I mentioned earlier, I hear
stories from people all the time about how these costs have very
concrete impacts on their lives. I spoke to a family, the Links
(ph), from Nashville, Tennessee. They've always tried to do right
by their workers with their family-run company, but they had
to do the unthinkable and lay off employees because their
health care costs were too high. I've talked to other
businesspeople who say, we were going to hire but
we decided not to when we got our monthly premiums. And so one of the goals that I
set out very early on in this process was how do
we control costs? Now, what we have done,
as I mentioned earlier, was to try to take an idea that
is not just a Democratic idea but actually is a
Republican idea, which is to set up exchanges. These are pools where people
can come in and get the same purchasing power as members
of Congress do as part of the federal employees
health care plan, as people who are lucky enough
to work with big businesses can do because there are a lot
of employees in those big businesses. What we've said is that if you
join one of these exchanges, you will have choice and
you'll have competition. You will have a menu of private
insurance options that you'll be able to purchase, but because
you're not purchasing it on your own, you're purchasing it
as part of a big group, you're going to be able
to get lower costs. For folks who even with those
lower costs still can't afford coverage, we'd provide
some subsidies. But here's what I want to
emphasize is that even without the subsidies it's estimated by
the Congressional Budget Office that the plan we put forward
would lower the costs in the individual market for the
average person who's just trying to buy health insurance and
they don't -- they're not lucky enough to work
for a big company, would lower their costs by
between 14 and 20 percent. So, Lamar, when you mentioned
earlier that you said premiums go up -- that's
just not the case, according to the
Congressional Budget Office. Senator Alexander:
Mr. President, if you're
going to contradict me, I ought to have a chance to --
the Congressional Budget Office report says that premiums will
rise in the individual market as a result of the Senate bill. The President:
No, no, no, no -- let me
-- and this is an example of where we've got to
get our facts straight. Senator Alexander:
That's my point. The President:
Well, exactly. So let me respond
to what you just said, Lamar, because it's not
factually accurate. Here's what the Congressional
Budget Office says. The costs for families for the
same type of coverage as they're currently receiving would
go down 14 to 20 percent. What the Congressional
Budget Office says is, is that because now they've got
a better deal because policies are cheaper, they may choose to
buy better coverage than they have right now and that might be
10 to 13 percent more expensive than the bad insurance
that they had previously. But they didn't say that the
actual premiums would be going up. What they said was they'd be
going down by 14 to 20 percent. And I promise you, I've gone
through this carefully with the Congressional Budget Office. And I'll be happy to present
this to the press and whoever is listening, because this
is an important issue. Senator Alexander:
Well, may I -- may I -- The President:
Let me just finish, Lamar. Now, the -- what we've done is
we've tried to take every single cost containment idea
that's out there. Every proposal that health care
economists say will reduce health care costs, we've tried
to adopt in the various proposals. There are some additional ideas
that Republicans have presented that we think are interesting
and we also tried to include. So, let me give you an example. You mentioned the idea of buying
across state lines, insurance. That's something that I've put
in my proposal that's actually in the Senate proposal. I think that it
shows some promise. You mentioned that as -- that
Mike Enzi has previously said, that he's interested in small
businesses being able to pool in the equivalent of
some sort of exchange. So that's where
there's some overlap. But I just think it's very
important to understand that what we've done is to try
to take every single cost containment idea that's out
there and try to adopt it in this bill. What I'd like to do is to see if
we can proceed and have a very concrete conversation about what
are the ideas that you guys have that you don't think are in
our bill to contain costs. And what I want to do is to see
if maybe we can adopt some of those or refine what we've
already done in order to further reduce costs. Senator Alexander:
Mr. President, I've
had my time -- The President:
And what I'd like to do
also is to make sure that you maybe suggest some of the
ideas that are currently in the bill that you think are
good, because, Lamar, in your opening introduction,
what I saw was sort of a -- the usual critique of why
you thought it was bad. But as I said, we've adopted
a lot of the ideas that we've heard from your
side of the aisle. So I hope maybe you
could say, well, those are the ones that
we think are good ideas; here are the things that
we think are bad ideas, as opposed to just
painting in broad brush. Go ahead. Senator Alexander:
Mr. President, let me --
let me show some respect for my colleagues here. They're all here eager to speak,
all sure they could do a better job than I could on
any of these points. And what I would like to do is
get back directly to you with why I believe -- with respect
-- you're wrong about the bill. Your bill would increase
premiums, I believe; you say it wouldn't. So rather than argue with
you in public about it, I'd like to put my facts
down, give them to you. Maybe other colleagues
will say that. As far as Mike Enzi's proposal,
he is ready to talk about it; others are. The President:
Good. Senator Alexander:
So I appreciate the
opportunity that Mitch and John gave me to talk. You've made some
interesting points, and why not let other members of
Congress have a chance to talk. The President:
I think it's a great idea. I'd like to get this issue
settled about whether premiums are reduced before
we leave today, because I'm pretty
certain I'm not wrong. And you give us the information
-- and we're going to be here all afternoon. I promise you we'll get this
settled before the day is out. All right. Mitch, who would you like
to talk about cost? Senator McConnell:
Yes, Mr. President, since some liberties
have been taken here, let me just make a
quick observation. Then I'm going to call on Dr.
Coburn to make our framing statement on the issue
of cost containment. One thing I think we need
to be acutely aware of, ladies and gentlemen, we are
here representing the American people. And Harry mentioned
several polls. I think it is not irrelevant
that the American people, if you average out
all of the polls, are opposed to
this bill by 55-37. And we know from a USA Today
Gallup poll out this morning, they're opposed to using
the reconciliation device, the short-circuit approach
that Lamar referred to, that would end up with only
bipartisan opposition by 52-39. Now, I'd like to call on Dr. Tom
Coburn -- he's been a practicing physician for many years -- to
address the cost containment issue. The President:
Tom. Senator Coburn:
Thank you. Well, Mr. President, thanks
for having us do this. I think today is going
to be enlightening. The first thing I would do
is put out a caution to us, because what I see the Congress
doing -- and what I saw this last year -- is us actually
performing bad medicine. And that is that we get stuck in
the idea of treating the symptom rather than treating
the disease. And whether you go to Harvard
or whether you go to Thomson Reuters, there are some facts
we know about health care in America. And the facts we know is one out
of every three dollars that gets spent doesn't help anybody get
well and doesn't prevent anybody from getting sick. The second thing we know is,
from the Congressional Research Service, that most of the mal
drivers today in health care come from government
rules and regulations. The government now directs
over 60 percent of the health care in this country. And if throwing money at it and
creating new government programs could solve it, we wouldn't be
sitting here today because we've done all that, it hasn't worked. So what I thought we ought to do
is maybe talk about why does it cost so much? Because the thing that keeps
people from getting access to care in our country is cost. You mentioned Malia and Sasha. The fact is, is with young
kids going to the ER, whether they have
meningitis or asthma, they're going to get
treated in this country. But they may get labeled with a
preexisting illness after that, and that's another thing I'd be
happy to talk about at a later time. But the fact is, is we know
how to treat acute asthma. What we don't do a good job of
is preventing children from getting acute asthma. We don't do the good
job of prevention. So when you break down the cost,
what we know is 33 percent of the cost in health care
shouldn't be there. And how do we go
about doing that, and what are the
components of that cost? And when you look at,
when it's studied, and if you look at what Malcolm
Sparrow from Harvard says -- he says 20 percent of the cost
of federal government health care is fraud. That's his number. If you look at Thomson Reuters
-- when they look at all of this, they say at least 15
percent of government-run health care is fraud. Well, when you look at the total
amount of health care that's government-run, you're
talking $150 billion a year. So tomorrow, if we got
together and fixed fraud, we could cut health care 7.5
percent tomorrow for people in this country. So what we ought to do is
do the Willie Sutton thing; we ought to go for
where the money is. What's the other area? What we do know -- and
I'm guilty of this; Dr. Barrasso is guilty of it;
Dr. Boustany is guilty of it -- is a large portion of the tests
we order every day aren't for patients, they're for doctors. And the reason they're there is
because we are risk-averse to the tort system and extortion
system that's out there today in health care. And there are a lot
of ways to fix that, but I just went through last
night -- if you add up what Thomson Reuters, which looked at
all the studies that have been done and combined them in --
they say between $625 billion and $850 billion a year of
health care dollars are wasted. So it seems to me if cost is the
number one thing that's keeping people from getting care, then
the efforts of us as we go after cost ought to be to go to those
areas where the cost is wasted. And there's a philosophical
difference in how we do that. One wants more
government-centered approach to that; I would personally prefer
a more patient-centered, market-oriented
approach to that. But nevertheless, there's
where we can come together, just on those two areas, where
we could cut costs 15 percent tomorrow. And that's for everybody
in the country. What would happen to access
in this country if tomorrow everybody's health care
costs went down 15 percent? Access would markedly increase. So what I would hope we would
do is that we would go back and concentrate on the areas that
have the biggest pot of gold for us. And the biggest pot of gold
is, is we don't incentivize prevention. We don't pay rewards for a great
management of chronic disease. We have a system throughout the
country where we're encouraging lawsuits that aren't productive
for the country and what they actually do is cause the cost of
health care to go through the roof. We also know there's some other
real things that we ought to address. There are conflict of interests
within the medical field. There's nothing wrong with
addressing those and taking those off. We know that we do not -- we
absolutely do not incentivize prevention. And I'm not talking about
creating walking paths -- I'm talking about paying people who
actually do a good job to do prevention; talking about
changing the school lunch programs where it meets the
needs, nutritional needs, of Americans; changing the
food stamp program where it incentivizes people to
eat the right things, not the wrong things. We actually create more diabetes
through the food stamp program and the school lunch program
than probably any other thing because we're not feeding --
offering and incentivizing a great response. So I think if -- I think
it's great that we're coming together, but the goal is in,
where's the cost excesses? And what I would hope we would
do is we would look at that and say, how do we come together and
actually achieve a reduction in the extortion that goes on in
this country in terms of medical malpractice -- and there's lot
of ways to do that without us mandating to the states. I know -- and some -- you have
some of that in these new thoughts, in terms of
incentivizing states to do that. How do we do that in terms of
creating an elimination of fraud? When you compare the
private sector fraud rates, it's 1 percent, compared
to Medicare and Medicaid. There's estimates that there's
$15 billion worth of fraud in Medicaid a year in
New York City alone. And we haven't attacked that. We haven't gone
where the money is. And my hope would be that we
would look at where the money is, and if truly it's accurate
-- and I don't know many people that will disagree that one
in three dollars doesn't help somebody get well and doesn't
prevent -- then we ought to be going for that one
in three dollars. And we ought to do it not by
creating a whole bunch of new government programs, but by
creating an incentive to reward people. In your new bill, you
have good fraud programs, but you lack the
biggest thing to do. The biggest thing on fraud is to
have undercover patients so that people know we're checking
on whether or not this is a legitimate bill. And you don't know who's an
undercover patient and who's not, and all of a sudden you
start changing your attitude of whether or not you're going to
milk Medicare or you're going to milk Medicaid. Senator Reid:
Mr. President, if
I could just say, I'm not an expert on much but I
am filibusters and we've got 40 members of Congress here. The President:
Tom, you made some
powerful points. You want to just
wrap up real quick? Senator Coburn:
No, I'll just finish with that, is with one out of three
dollars not helping everybody, we ought to go for where it is. The President:
Well, Tom, I appreciate what you said. I think we're going to
have Steny Hoyer go next. I just want to make
this quick point. Every good idea that we've heard
about reducing fraud and abuse in the Medicare and
Medicaid system, we've adopted in
our legislation. So that's an example of where we
agree -- we want to eliminate fraud and abuse within
the government systems. Let's recognize, though, that
those savings in the government systems, which will help
taxpayers and allow us to do more, doesn't account for the
rising costs in the private marketplace. Now, the private marketplace,
you mentioned the issue of medical malpractice and
frivolous lawsuits, and as you indicated, these are
areas where Secretary Sebelius has already begun to try to give
states some incentives to do that. On the prevention side, there's
a whole host of provisions inside the legislation that's
been passed by the House and the Senate, and I think
Steny will talk about it. So we've identified some areas
we agree on and then the question just is, does that
help the average family in the individual market who
potentially can get cost? But, Steny, why don't you -- Senator Coburn:
Well, let me just
respond to one thing. You get cost-shifted every penny
that gets wasted on Medicare, and that gets cost-shifted
to the private sector. So if in fact we're wasting
it in the public sector -- The President:
It would help. Senator Coburn:
-- we're shifting it
to the private sector. The President:
You and I agree on this. Steny. Congressman Hoyer:
Mr. President,
thank you very much. A quote I will use is, we should
have available and affordable health care to every American
citizen, to every family. I suppose there are a whole lot
of every Americans and American families listening to us
today and watching us, and they're hoping that we're
all sitting around here talking about them, not about us. That's the message they're
sending to all of us, and they're absolutely correct. And we believe that we have been
addressing them and trying to get some of these stories that
all of us hear to a place where they won't be so tragic for
individuals and for families. Every one of us has a story. I had a message on my telephone
answering machine just a little while ago, a couple
of weeks ago. A woman that I know
well called me up. She said, "Steny, I was just
diagnosed with a tumor, and I've got to be operated on. I don't have insurance. My husband makes $28,000; I
work part-time and make about $5,000." She says, "We're making too
much money for Medicaid. And we're going to go to the
University of Maryland Hospital. They want 50 percent
down of a $25,000 bill." She doesn't have that. And we're working on that,
trying to get her some additional help. Hopefully, we can. I had a small business in my
district, like all of you, who last year paid $1,100 -- a
couple, healthy, paid $1,100. Their bill is going to go up
to $1,830 -- $1,830 next year. That's a 67 percent increase. They called me up and said, "We
don't know that we can afford to keep our small business going." So all of us -- John
McCain, my good friend, that was your quote,
as you probably recall, in the debate that you
had with President Obama. And the good thing was that both
of you in effect said the same thing, that we need to get to
the objective of covering all Americans and having them have
access to affordable health care. We agree with that. I think probably everyone
around this table agrees to it. So what we're going to
talk about is the how. Cost containment is clearly one
of those issues that we need to deal with -- cost containment
for that small business that is having a 67 percent increase;
cost containment for that woman who can't afford insurance but
has a health care issue that she can't avoid -- it's
not optional for her. So we have to deal with that. Many in my caucus believe that
one way of doing that is to increase competition,
to have an open, free market that is transparent. I think all of us around this
table agree that a free market does that -- an open market,
a transparent market -- where people can compare prices and
compare what they're going to get. And that's what we've tried
to do in both these bills. We did it a little differently,
but that's what we tried to do. We hope we can get
agreement on doing that. An open, transparent market will
bring down cost, we believe. And in addition to
that, Senator Coburn, we certainly agree with you that
one in three dollars is not being spent as effectively
as it should be. And we have a lot of provisions
in both bills, as you well know, that try to get us to a place
where administrative costs, health information technology,
so many other things are done to wring the costs out. And in addition, you speak
eloquently and correctly about wringing fraud, waste, and
abuse out of this system. I know you're happy to have seen
in our bill -- in the House bill and in the Senate bill -- very
substantial investment in doing just what you suggest. So I think we have agreement on
conflict of interest in delivery of medicine as well. We've dealt that --
with that in our bill; we've dealt with it
previously, as you well know. We've put incentives
for prevention in here, which you mentioned. We absolutely agree on that. We think this bill does that. Now, you may have a
better way of doing it. We need to talk about
how that better way is. But we certainly have addressed
the issue of making sure that we have wellness as a
focus, not sickness. We have to deal with sickness,
but what we really want is wellness. So we've worked very hard
on that in this bill. You mentioned the school lunch
and food stamp programs. I'm sure we can get
there, too, an agreement. We certainly agree with
the premise you stated. We'll figure out a way
and means to get there. What have we done? We've stopped premium
discrimination. That clearly ups cost. If you're in a small market,
as the President pointed out, you're going to
pay a higher price. We don't do that. Why? Because we're in a big market.
We have a competitive edge. And the insurance company
doesn't have preexisting conditions for us, they
just take us as a group. That's what we're trying
to get for every American; that they have access
to a large group. Whether they're an individual --
this woman who has the tumor -- or whether they're
a small business, they can get into a large group. We're trying to do that. We want to go
after fraud, waste, and abuse -- I'll reiterate
that -- a transparent market; stop premium discrimination; and
make sure that people with a preexisting condition -- as
none of us have a problem with, but a lot of people do have --
because we're in a big group -- that are in a large group
and would prohibit that. You agree with
that rhetorically. Now, it's not in
your legislation, but you certainly agree with
capping out-of-pocket expenses on an annual basis or lifetime
basis that you don't think that's right that people ought
to be -- continue to be covered. We believe there needs to be
better coordination of care. You're a doctor. You have a number of
doctors in the room. We believe that there ought to
be a way that we can incentivize the coordination of care. We also believe that there
should be incentives to provide care based upon best practices,
not based upon simply procedures being reimbursed. I think we all agree on that. You're shaking your
head in agreement, and I know we all agree on that. And you're right, we
have to get there. But I would suggest to you that
one of the things that many in my caucus felt very strongly
about in terms of competition was having a public option. Now, there was real
disagreement on that issue, but many in my caucus thought
that would open up competition, would provide for access for
every citizen if they didn't have access in some other way. Now, Senator Baucus is going to
speak more specifically in terms of our cost containment, but
doughnut hole certainly is one of the issues that
we need to deal with. The doughnut hole we deal with
in our legislation in the House. We would hope that it is in
legislation that we agree upon, because seniors are confronted
with extraordinary out-of-pocket costs for a very significant
portion of the cost of their prescription drugs. And seniors are
concerned about that. We take care of
that in our bill. But I think what the American
public that's listening and watching expects us
to do, Mr. President, is what you're doing --
bringing us together, coming to agreement to make sure
that we get to a place where we reach the objective that
President Obama and candidate McCain expressed as the
objective on behalf of the American people.
Thank you, Mr. President. The President:
Before you go, Max,
I just want to ask, whether it's you, Tom, or
anybody else on the Republican side, and maybe some of
the House members might be interested -- Senator Coburn
mentioned some cost containment issues where it sounds like we
agree: fraud and abuse. We agree. It sounds like you have maybe
one other idea that you don't think is in our proposal, but
the idea of undercover patients, but that's something that I'd be
very interested in exploring. I don't think conceptually
that would be a problem. The issue of prevention, and
that includes, by the way, things like how our kids are
eating and getting exercise. And I'm proud of the First Lady
for working to see what she can do on that front. And that's -- there are some
provisions in the legislation that's already been passed
through the Senate and the House that directly relate to this
that I think you'd be supportive of. The issue of defensive
medicine, as I indicated, Secretary Sebelius
is working on this, but I think that there are
things that we could do at the state level to help foster
innovation and eliminate some of the concerns that you've got. I would be interested in hearing
from any of our Republican colleagues what objections they
have to what we consider one of the biggest ways of
driving down costs, and that's what Steny
just referred to, which is allowing individuals
and small businesses who are currently trapped in a very
expensive market -- essentially they're having to be out there
fending for themselves -- to be able to buy into
essentially a large group, to become part of a large
group just like all of us as government employees are
part of a large group, so that they have more
negotiating power with the insurance companies -- which
I think we all agree would drive down costs. If you've got some
bigger purchasing power, insurance companies
want more customers; they would drive
down those costs. I know some of you have agreed
to this as a concept in the past. And so my question is, is there
something in terms of the way the House and Senate bills have
been structured that leads you to be concerned or want to not
move forward on that approach? John. Congressman Boehner:
Well, Mr. President, I'd like to yield to Mr.
Kline from Minnesota, who will talk about the small
business health plans in terms of how we would
propose to do this. Congressman Kline:
Thank you, Leader. Thank you, Mr. President. I think that Senator Alexander
framed our overall position very well when he said that we're
looking at thousands of pages of legislation and we believe a
better approach is to go step by step to address
these issues of cost. We certainly agree that you get
better economies of scale if you can come together. We have proposed in both the
House and the Senate in fact for a number of years that small
businesses be able to band together in small business
health plans or association health plans. We all know, and I've
heard everybody say here, that small businesses are the
engine that drives our economy. We also know that about half of
the uninsured either work for small businesses or depend
upon somebody who does. And so we believe that we
ought to address that issue by allowing these small businesses
to band together in the same way that I think, Mr.
President, you mentioned, large companies do -- I mean,
really the same way -- so that they get all the advantages
of, if they self-insure, being able to avoid
the 50 state mandates; being able to lower their
administrative costs because they're not having
to deal with that. And it will lower the cost
of premiums for these small businesses and allow them
to insure more people, and to keep people that are
already insured on the books, because we all know -- we all
know stories like we've heard here of small businesses
that are saying, I can no longer provide
insurance for my employees. Small businesses have been
asking for this for years. It's not a new idea. They've been asking
for it for years. And we think it's a far better
way to get these economies of scale than the exchange thing
that's in the huge -- that's in the huge bill, that this will
actually allow businesses to be able to lower their cost
exactly the same way that large businesses do. The President:
Okay. Max is going to go,
and then I'll go to you, Rob. Max, do you want to address this
issue of how we can allow people to buy into large groups, how
the Senate bill accomplishes it, and I don't know if you want to
remark on what John just said. Senator Baucus:
Sure. Absolutely, though I'd
first like to say something that just strikes me just in spades. Frankly, we all have studied
this issue a lot -- health care reform. We basically know what the
problems are, all of us. We basically know that the
current system is unsustainable. We are actually quite close. There's not a lot of difference
-- close in the sense that, without being corny or
dramatic about this, if the American people want
us to do something basically reasonable, it doesn't
have to be one congressman, one senator's provision, but
basically reasonable -- we are on the verge and the cusp with
not too much effort to try to bridge a lot of gaps here
because the gaps in my judgment are not that great. Let's take the list, for
example, that Lamar mentioned. As you've said, Mr. President,
we are basically including most of those provisions, if not
all, in our joint legislation. Selling insurance
across state lines, for example -- we allow for that
not exactly in the way that some would, but assure it with
compacts and once state exchanges are up people will be
able to buy and sell insurance across state lines and
achieve that competition. In addition, you
mentioned lawsuits. Secretary Sebelius is working to
try and find ways to encourage states to settle, resolve
issues before they become big, bad lawsuits. After that, Lamar says we should
find ways for states to be able to lower their costs, so we do
that -- we let states opt out. They can do what they want to do
-- and Senator Wyden also has a proposal; Senator
Cantwell has a proposal. We give a lot of
flexibility in that regard. Expanding HSAs -- that's fine,
there's nothing wrong with HSAs -- but we also have to have
products for poorer people, lower-income people. HSAs work pretty well if you
have middle or high income. Preexisting conditions --
clearly, we all agree on that. We have those
provisions in our bill. With respect to small business,
we're not that far apart. Some suggest association health
plans where small business people can band together
in an association, pool, and get better
insurance. That's fine. What we provide for in our
legislation is something similar -- it's called the SHOP Act. Various senators, bipartisan,
have worked on this, and basically it allows --
sets up a small business arrangement in exchanges. Small business participates in
their own exchange and gets the advantage of all the pooling,
and then they can do what federal employees do -- they
can shop and compare and to get the best deal. And I would guess that most
small businessmen would like to do that. I might add that we're also
providing tax incentives, tax credits, for businesses and
small business that wants to purchase health insurance
for its employees. And it's pretty good -- it's 35
percent tax credit first couple years, and then once the
exchange is up it's 50 percent. So the main point is we're
not really that far apart. We're trying to find ways
for small business to pool, small business to take
advantage of competition, they shop and compare; and also
some tax provisions that enable -- to encourage businesses
to get health insurance. So I might say, too, that if you
look at all the provisions that Steny outlined, may
help them, we agree. We agree on prevention. There are major prevention
provisions in our legislation, as Senator Coburn mentioned. We also agree on trying to
change the way we reimburse docs. I think the biggest
game-changer here, frankly, is how we reimburse our doctors
-- based more on quality rather than quantity. I know Tom Coburn really
agrees with that as a doctor. Most doctors do. It's another example
-- we really are close. And I think that once we keep
pushing on those areas that we're close, this will
make a difference. Exchanges, as you
mentioned, Mr. President, it's a Republican
idea. It works. What I like about exchanges
-- it's like Orbitz, it's like Expedia. You go to Orbitz or Expedia
to buy a airline ticket, you compare it to get the
best price -- that's basically what this is. It's an exchange, you go to
the exchange and shop around, and you get your best price. That's going to
help, in my judgment. I also think that we should --
hospitals should publish the cost of their basic procedures,
what's an appendectomy or a colonoscopy or whatnot, to
enable consumers to shop around, where's the best price. We all know that there's a wide
disparity in what hospitals charge for the same procedures. I think the disinfectant of
sunshine helps -- it helps consumers, it helps our people. And fraud and waste,
we talked about that. We have major provisions in our
bill to reduce fraud and waste. Mr. President, I compliment you
because in your proposal you go even farther. The President:
We took some additional ideas
from folks like Congressman Roskam. Senator Baucus:
They're great ideas
and we addressed unnecessary readmission rates
in hospitals, et cetera. The main point is
we basically agree. There's not a lot
of difference here. And I'd just like us to kind of
just -- there's opportunity for us to work out some
of these differences. The President:
Mitch, is there somebody -- Senator McConnell:
Yes, Mr. President. I'm going to yield to John here. The President:
John. Congressman Boehner:
I'd like to yield to
Dave Camp to continue this conversation
about cost containment. The President:
Dave. Congressman Camp:
Thank you, Leader
Boehner, and thank you, Mr. President, for
the invitation today. I think as we focus this part
of the conversation on cost, a lot of Americans say to me,
if you're really interested in controlling costs, well, maybe
you shouldn't be spending a trillion dollars on health care
as the Senate and House bills do. Also, cutting Medicare benefits
by a half a trillion dollars to fund this new entitlement is
I think a step in the wrong direction, and many
Americans do as well. The non-partisan actuaries at
the Center for Medicare and Medicaid Services say on page
four of their letter on the Senate-passed bill that it would
bend the cost curve in the wrong direction by about a quarter
of a trillion dollars. They specifically say the health
expenditures under the Senate bill would increase
by $222 billion. A key way of reducing costs
that's missing from the House and Senate bills is responsible
lawsuit reform that guarantees injured parties, much like our
two largest states have adopted -- Texas and California --
access to all economic damages, such as future medical care. If they need nursing care in
the future, they'll get it; lost wages; reasonable
awards for punitive damages and pain and suffering. On page four of its
letter to Senator Hatch, CBO found that this common-sense
reform would reduce the federal deficit by more
than $50 billion. Now, that's just
on the government, because as we know CBO doesn't
score the private side on this. And PricewaterhouseCoopers has
done a study that said savings could be as high as $239 billion
if this reform were adopted. There are two features in the
House and Senate bills that move in the wrong direction. Both bills feature restrictions
on health spending accounts where people can save tax-free
for their health care, as well as FSAs,
flexible-spending accounts. These changes are such as they
ban the use of over-the-counter medication out of
both of these plans. There's a new cap on FSA
contributions of $2,500. That text -- that language
is found on page 1,959 of the Senate bill. And that will hinder the
growth of those plans. And -- which encourage Americans
to consider quality and price when they purchase health care. And let me just say,
under HSA plans, premiums increased just 1.3
percent for individuals in 2007 to 2008, and declined 5.4
percent for families in that same period, and when people
switch from a PPO -- a preferred provider organization -- to
a health savings account, their premiums decline
by an average of $3,800. Now, another concern I
have is the Senate bill, which on page 982 creates an
unelected board charged with recommending even more
Medicare reductions. And if Congress doesn't
accept these recommendations, they have to find other Medicare
spending to cut instead. And that gives, I think, too
much authority to unelected bureaucrats rather than to
elected representatives of the people and the power to
decide whether to cut Medicare and by how much. Now, holding down health care
costs for the government is important. But I think it's also important
to hold down costs for families and employees. The President:
Dave, I don't mean to interrupt. But the -- we're going to have
the whole section talking about deficits. And we can talk about
the changes in Medicare. We were trying to focus on costs
related to lowering families'. And the only concern
I've got is -- look, if every speaker at least on
one side is going through every provision and saying
what they don't like, it's going to be hard for us to
see if we can arrive at some agreements on things
that we all agree on. So I don't want to
try to cut you off. Please finish up -- Congressman Camp:
Well, I'm almost
-- I'm almost done. The President:
-- but I just want to
kind of point out that -- Congressman Camp:
I'm almost done. I do want to say on this
issue on premiums, CBO, in their letter, on page four,
does say that the estimated average premium per person
for non-group policies would increase by 10 to 13 percent. The President:
This is the discussion that I just
had to -- about Lamar. And -- Congressman Camp:
Yes, they do say that. And they do say that the value
of the benefit is higher, and that is why it goes up. The President:
Right. Congressman Camp:
But the reason the
value of the benefit is higher is because of the
mandates contained in the legislation. And this is one of our big
concerns with a lot of the issues that have been raised. Yes, we have similarities. But when all of this
is structured around a government-centered exchange
that sets the standard for these policies, states can't get out
of these requirements unless they seek a waiver
from the Secretary. That kind of approach
raises costs. And so both of your comments
were correct that costs do go up and it's because they
have a richer benefit, but the reason it's richer
is because of the mandates contained in these
very large bills. The President:
Okay, I'm going to let -- Rob, feel free to respond to anything
that Dave indicated or to any of the other issues that
have been discussed. Congressman Andrews:
Thank you, Mr. President. I want to thank my friend
Tom Coburn, and John Kline, for the spirit of conversation
which they offered and try to carry that forward a little bit. The President asked at the
beginning of this what ideas do we share about cutting costs. And Tom, I think you
had some very good ones. Fraud, that the President has
a proposal that says we should have a database, if you've
committed fraud against Medicare once, you can't make
a contract again. Wellness, there's a lot of
good ideas in the bills. Junk lawsuits, I think that
there's -- what Secretary Sebelius is doing is very
important in curtailing that. And then the President asked the
question about whether we can find agreement on pooling the
purchasing power of small businesses and individuals so
they can get the same deal that big companies and
members of Congress get. And my friend John Kline
talked about the association health plan proposal. Respectfully, John, I think that
what you're talking about with association health plans and
what we're talking about with exchanges is a
semantic difference. It's a matter of pooling the
purchasing power of small businesses and individuals
to get a better deal. But there is one substantive
difference that I want to ask about, because we are
concerned about it. If we can resolve this,
I think we could agree. Let's take the case of a woman
who has a baby by C-section, and she lives in one of the many
states that say you can't be kicked out of the hospital after
you've had a C-section until your doctor thinks it's time for
you and the baby to go home. Now, under the association
health plan proposal, that rule wouldn't apply
to that lady and her baby; that there would be no
protection of her in that situation. We think, John, that there
shouldn't be necessarily 51 different rules for each state,
but there ought to be some minimum federal standards in
these exchange to protect people in cases like that. So I think the issue is, if
we could find a way to agree, that in a case like this where a
lady has a baby by C-section and has the ability to not have the
insurance company get between her and her doctor, so the
doctor makes the decision about when they go home, we
could figure this out. And if you -- Congressman Kline:
If I could just respond to that, my friend knows very well that
there are large companies today who operate under what I'm
proposing for association health plans. They get a waiver, they don't
have to comply with the individual mandates
of all 50 states, and I don't hear people
complaining about the insurance policies that they're getting
from their big companies. In fact -- Congressman Andrews:
We do. Congressman Kline:
-- many of those now
would fall into what we've been calling Cadillac
plans because they provide very excellent service. So I think that, frankly, is a
red herring and I think that we can -- that you're not going to
have adequate coverage if you have association health plan
that's working under the same rules of a large company. Congressman Andrews:
But, John, would you
favor a standard that says they have to do something
like that or would you just leave it up to the
insurance company? Congressman Kline:
I would say that we
put the association health plans in exactly the same
position that large companies are today with exactly
the same rules under -- Congressman Andrews:
See, we don't -- I mean, with all respect, we
don't agree with that. We don't agree with the idea
that the insurance company should get to make that kind of
decision about whether the lady goes home Thursday or Sunday. Now, I don't think
that's intrusive, I think that makes common sense,
but if we could find a way to bridge that gap -- and I think
we could -- then I think the AHPs that you support aren't
all that different than the exchanges that we do and I would
think that would be a common ground. The President:
Good. This has been
a useful conversation. Paul Ryan wants to
make a comment but -- Senator McConnell:
Mr. President, could I just
interject one quick point here very quick, just in terms of
trying to keep everything fair, which I know you want to do. To this point, the Republicans
have used 24 minutes, the Democrats 52 minutes. Let's try to have as
much balance as we can. Congressman Ryan:
I think the
Republican leaders are controlling the time
for the Republicans, if I'm not mistaken
-- is that right? The President:
I don't think
that's quite right, but I'm just going back
and forth here, Mitch. I think we're just trying to go
back and forth, but that's okay. Paul, I was about to call on
you, if that's all right. Go ahead. Congressman Ryan:
All right. Rob, here's basically
what we're looking at. The difference is this: We don't
think all the answers lie in Washington regulating
all of this. So the problem with the approach
we're seeing that you're offering, which I
do believe, Senator, is very different than
what we're saying, is we don't want to have --
sit in Washington and mandate all of these things. So what you're doing is you're
defining exactly what kind of health insurance
people can have; you're mandating them to buy
this kind of health insurance. And so we simply say, look,
if the National Restaurant Association or the National
Federation of Independent Business, on behalf
of their members, wants to set up an
association health plan, we think they'll probably do
a good job on behalf of their members. Let them decide to do that
instead of restricting insurance competition by federalizing
the regulation of insurance, and by mandating exactly
how it will work, you make it more expensive and
you reduce the competition among insurers for people's business. We want to decentralize
the system, give more power to
small businesses, more power to individuals, and
make insurers compete more. But if you federalize it and
standardize it and mandate it, you do not achieve that. And that's the big
difference we have. Congressman Camp:
Paul, would you
yield -- Mr. President, can I ask him to yield? The President:
We're not in a
formal hearing here -- (laughter) -- so go ahead. Congressman Camp:
Paul, I read your --
and I thought one of the things that you said is that
there should be some minimum consumer protections in the
exchanges that you've proposed. Did I get that wrong? Congressman Ryan:
And there are in every state. And so what we're
simply saying is, look, lots of us have offered
lots of different ideas. We've got dozens of Republican
ideas offered in the House in bills, in the Senate, and many
of us look at the point of the fact that the states -- do
we distrust our governors, do we distrust our
state legislatures, do we distrust all the
state insurance -- okay, some of you may do that. (laughter) Congressman Camp:
Depends on who it is, Paul. Congressman Ryan:
But should we regulate all this? Should people in Washington
decide exactly how this works and what you can and cannot buy? It's just a difference
in philosophy -- The President:
No, no, no, look -- this
is an important point. We've got a couple other
people who want to speak. We've gone about 55
minutes on this section. We're running over because
we went long on the opening statements. And you're right, there was
an imbalance on the opening statements because I'm the
President and so I made -- (laughter) -- I didn't count my time in
terms of dividing it evenly. In this section, Mitch, we've
gone back and forth pretty well. Senator Reid:
Senator Schumer
for the Senate -- The President:
I know Senator
Schumer wants to speak, and I know that Jim Clyburn
wants to say something very quickly and -- Senator McConnell:
And Jon Kyl would
like to as well. The President:
And Jon. What I want to do, though,
is just focus in on this philosophical debate. This is a legitimate debate. And it actually speaks to the
point that Congressman Camp was making earlier about what's
happening in the exchanges. When I was young, just
got out of college, I had to buy auto insurance. I had a beat-up old car. And I won't name the name
of the insurance company, but there was a company --
let's call it Acme Insurance in Illinois. And I was paying my
premiums every month. After about six months I got
rear-ended and I called up Acme and said, I'd like to see if
I can get my car repaired, and they laughed at me over the
phone because really this was set up not to actually
provide insurance; what it was set up was to
meet the legal requirements. But it really wasn't
serious insurance. Now, it's one thing if you've got
an old beat-up car that you can't get fixed. It's another thing
if your kid is sick, or you've got breast cancer. So the general idea has been
here that we should set up some minimum standards
within the exchange, that a plan that
people are buying into, whether it's a small
business or an individual, should be at least solid enough
that if your kid got sick, they're actually
going to be treated; that if something happened that
you weren't left with a huge bunch of out-of-pocket costs. It is true that you can always
get cheaper insurance if it has really high deductibles or
really high co-payments or doesn't cover as many things. And so there has to be a
balance that's struck there. I just want to
point out, though, that the principle of pooling is
at the center of both the Senate and the House bill. And the reason I'm pointing this
out is because there was a lot of talk about government
takeover of health care, and the implication, I think,
was that everybody was going to have to sign up for a
government health care plan. Now, that's not the issue. The issue here, which we've had
an honest disagreement about, is how much should government
set a baseline versus just letting people decide that,
I can't really get decent insurance but maybe this
is better than nothing. And that's a
legitimate argument. I don't disagree with that. But I just wanted to point out
that when we start talking about how much government
involvement is at issue here, it's not because the House
or the Senate bills are a government takeover
of health care; it is that the House and the
Senate bills put in place some regulations that restrict how
insurance companies operate, and if there's an exchange
or a pool that's set up, that there's a baseline sort of
minimum requirements that were expected. And I understand that there
may be some philosophical differences on the other side
of the aisle about that issue. Chuck, go ahead. Senator Schumer:
Thank you, Mr. President.
And I thank you. I think this has been a
constructive dialogue. I was glad to hear my
friend Tom Coburn's remarks. I think we agree
with most of them, and particularly the point that
about a third of all of the spending that's
done in Medicare, Medicaid -- I would imagine a
lot of it is in the private sector as well -- doesn't go
to really good health care, it goes to other things. And the real nub of this is how
do we wring that waste out, that fraud, abuse, duplication,
without interfering with the good care that we want every
person on Medicare, Medicaid, and private insurance to get. The average citizen
knows this happens. How many times, when you
look at your medical bill, you've undergone
a minor procedure, and you see Dr. Smith, $4,000,
and you sort of vaguely remember he just waved and poked
his head in the door? Or how about -- probably it's
happening right now -- there's some salesman talking to
some doctor and saying, hey, my company will finance a
machine for you for a million dollars, so you don't
have to pay for it, you can gradually pay it. We'll show you how to fill it up
all the time and you'll increase your income by $200,000. And there's another machine
three blocks away that's already working and available. So these are the things
we have to go after. And Tom, I thought your
suggestion of undercover patients -- and I
tried to check here, I don't think we do it
now -- is a great idea, and it's one that we
can come together on. I think there are other things
that we can come together on. Senator Cantwell put a provision
in the Senate bill that said we ought to reward doctors for
doing quality, not quantity, so that doctors -- and they're a
small number of doctors that go on, these Gawande's
study showed, -- thing in the New Yorker that
I think we've all read -- that a small number of people who are
just trying to maximize their income throw the
whole system off. It threw the whole
city of McAllen, Texas, off while El Paso
had much lower rates. Maria Cantwell has a provision
in there which I would think you folks could agree on, that says
that we ought to reward doctors for the quality, not the
quantity -- not the number of times they've put someone
through a machine, but how good the care is. There's a provision in there
Senator Rockefeller authored, it comes in the insurance part,
that says 80 to 85 percent of what insurance companies put
forward should go to the -- get money in for -- should
go to the patient. So I think we can do
all of these things. But it does -- but if we're
going to eliminate the waste, fraud and abuse in Medicare, it
does mean we're going to cut some of that out. And when I hear my friend Dave
Camp say you cannot cut money out of Medicare, well, we don't
want to cut the good stuff that you point out or not -- or
to then add the prevention. But if we're going to -- if
one-third -- if what Senator Coburn says, that one-third of
Medicare doesn't go to patient care, you can't just
get up there and say, we don't want to cut
anything out of Medicare. We want to cut the bad stuff
and keep the good stuff. And I think that's where we can
find common ground on some of the things you've mentioned,
some of the things that are in our bill. And I hope, at
least in this area, we can move forward that
way, because, frankly, the Republican Party has always
stood for getting rid of the waste, fraud, and
abuse in the system. In '97, it was the
centerpiece of your program, and all of a sudden
this year we're hearing, don't do any of that. That's something that I think
we can come together on. I thank you. Senator McConnell:
Mr. President, can
we turn to Jon Kyl. I'm sorry -- The President:
Sure. I'm sorry, you had
Jon. We're going to go to Jon. And then we're going
to go to Jim Clyburn. And then I think we're
going to take a break, because we've run out of time. So, Jon. Senator Kyl:
Thank you, Mr. President. I think you framed the issue
very well just a moment ago, because there are some
fundamental differences between us here that we
cannot paper over. And, Mr. President, when
you said that this is a philosophical debate and
it's a legitimate debate, I agree with that. We do not agree about the
fundamental question of who should be mostly in charge. And you identified this question
as central: Do you trust the states, or do you
trust Washington? Do you trust patients and
doctors making the decision, or do you trust Washington? Now, there is a mix of both,
of course, in health care. But there is a big difference
between our approaches. And there is so much in the
bills that you've supported that puts control in Washington that
we have a very difficult time supporting those provisions. And it's not a matter of just
saying we all agree on the goal of reducing waste,
fraud, and abuse. We all do, of course. It's how you do it. Now, let me give you
a couple of examples. Dave Camp, I think, pointed out
the answer to the dispute that you and Lamar Alexander
had a moment ago, and he was exactly right. Let me quote from the
Congressional Budget Office letter -- this is from Doug
Elmendorf to Evan Bayh, November 30th, 2009: "CBO and
Joint Tax Committee estimate that the average premium
per person covered, including dependents for
new non-group policies, would be about 10 percent to 13
percent higher in 2016 than the average premium for non-group
coverage in the same year under current law." Oliver Wyman, a very respected
third-party group says it's even more -- about 54 percent;
in my state of Arizona, 72 percent increase.
Why is it so? For a variety of reasons, but
one of which both you and Dave Camp agreed on. It is a richer benefit. How did it get that way? Because the federal government
would mandate it under your legislation in the
insurance exchanges. And as a result, there
would be a higher cost. How does this happen? There is an actuarial
requirement of 60 percent actuarial value in the exchange
for the least costly plan. But the average in the country
today of a high deductible plan is 48 percent. The range today is
40 to 80 percent, and the average is
between 55 and 60. So what the government
is doing here is saying, we're going to mandate that the
insurance cover more things than it does right now, and therefore
the cost is going to go up. Second example, you say, how
can we help small businesses? Well, we know one way you don't
help small businesses is by raising the payroll -- the
Medicare payroll tax on them, which is what this
legislation does. Besides that, it's a job killer. Look at the taxes on
beneficiaries as well -- this is a third example. You don't cut costs when you
raise taxes on medical devices that help us, when you raise
taxes on pharmaceutical products, when you raise taxes
on the insurance premiums themselves. "These fees on insurers,
medical devices, and pharmaceuticals would
increase costs for the affected firms, which would be passed
on to purchasers and would ultimately raise insurance
premiums by a corresponding amount" -- Congressional
Budget Office. So when you raise these taxes in
all of the different fees that are in this legislation, it
inevitably increases the costs on the consumer. And why do you have to
raise all of this money? Because of the expenses of the
legislation that underlie all of this. That's why Republicans would
rather start not by having to raise a lot of money in order to
pay the high cost of this bill, but to start a piece at a time,
directing solutions to specific problems. That way, you don't incur
all of the costs up front, which require you
to raise the taxes. The last quick point, one of the
worst things about this is for people that have catastrophic
medical expenses today after you've spent 7.5 percent of
your adjusted gross income, you can deduct that. This bill would raise
that to 10 percent. Who does that hurt? The very people you
promised, Mr. President, that you wouldn't allow taxes to
be raised on -- average age, 45; average income, $69,000. These are not wealthy people. It's just another example of why
because the bill has to raise so much money, it ends up hurting
the very people that we want to help. The President:
Okay, Jon. I'm going to go to you, Jim,
but I -- since as has tended to happen here, we end up talking
about criticisms of the existing bill as opposed to where
we might find agreement, I feel obliged just to go
through a couple of the points that you raised. Just to go back to the original
argument that Lamar and I had and we've now chased
around for quite some time. Look, if I'm a self-employed
person who right now can't get coverage or can only buy the
equivalent of Acme insurance that I had for my car --
so I have some sort of high-deductible plan. It's basically not health
insurance; it's house insurance. I'm going to -- I'm buying
that to protect me from some catastrophic
situation; otherwise, I'm just paying out of pocket.
I don't go to the doctor. I don't get preventive care. There are a whole bunch of
things I just do without. But if I get hit by a truck,
maybe I don't go bankrupt. All right, so that's what
I'm purchasing right now. What the Congressional
Budget Office is saying is, is that if I now have the
opportunity to actually buy a decent package inside the
exchange that costs me about 10 to 13 percent more but is
actually real insurance, then there are going to be
a bunch of people who take advantage of that. So, yes, I'm paying
10 to 13 percent more, because instead of buying an
apple, I'm getting an orange. They're two different things. Now, you can still -- you still
have an option of -- no, no, let me finish. The way that this bill is
structured uses a high-cost pool, a catastrophic pool, for
people who can't afford to buy that better insurance, but
overall for a basic package -- which, by the way, is a lot less
generous than we give ourselves in Congress. So I'm amused when people say,
let people have this not-so-good plan, let them have
a high-deductible. But there would be a riot in
Congress if we suddenly said, let's have Congress have
a high-deductible plan, because we all think it's pretty
important to provide coverage for our families. And the federal health insurance
program has a minimum benefit that all of us
take advantage of. And I haven't seen any
Republicans -- or Democrats -- in Congress suddenly
say, "You know what, we should have more choices and
not have to have this minimum benefit." So what we're basically saying
is we're going to do the same thing for these other folks that
we do for ourselves -- on the taxpayers' dime, by the way. Now, there is a legitimate
philosophical difference around that, but I think it's just very
important for us to remember that saying there's a baseline
of coverage that people should be able to get if they're
participating in this big pool is not some radical idea. And it's an idea that a lot
of states -- we were talking earlier about what states do --
a lot of states already do it. This, by the way, goes to the
other difference that we have when it comes to interstate
purchase of insurance. Actually, this is
a Republican idea, been championed by
the Republicans. We actually agree with the idea
that maybe if you get more regional markets and
national markets, as opposed to just
state-by-state markets, you might get more
choice and competition. People would be
able to say, gosh, there's a great insurance
company in Nevada and I live in New York and maybe
I can purchase it. That's actually something
that we find attractive. So do you guys. But again, the one difference,
as I understand it, and the reason you're not
supporting the approach that we take, is what we say is there
should be sort of a minimum baseline benefit,
because if not, what ends up happening is you
get a company set up in Nevada -- let's assume there
were no rules there, there are no protections for the
woman who's got breast cancer; they go into New York, they
offer pretty cheap insurance to everybody who's healthy; they
don't offer the same insurance to people who aren't so healthy
or have preexisting conditions. They drain from New York all the
healthy people who are getting cheaper rates, but now suddenly
everybody left in New York who doesn't qualify for that cheaper
plan is in a pool that's sicker, older, and their premiums go up. So what we've said is, well,
if we can set a baseline, then you can have
interstate competition, but it's not a
race to the bottom; rather everybody has
got some basic care. Now, these are legitimate
arguments to have. But I just want to point out
that this issue of government regulation, which we're going
to also be talking about with respect to insurance, is very
different than the way this has been framed during the course of
the debate over the last year, which is government
takeover of insurance. This is not a government
takeover of insurance. What it is, is saying let's set
up some baselines and then use market principles, the private
sector and pooling in order to make sure that people get
a better deal. So, Jim. And then what we're going to do
is we're just going to move on to the next topic. But anybody who wants to pick up
on what we've just talked about obviously can return
to that as well. Congressman Clyburn:
Thank you very
much, Mr. President. And, Mr. President, leaders,
and members of the Congress, there are two cost containment
issues that I think have not been sufficiently
vetted here today. Let me set this up by sharing
with you a conversation I had on -- yesterday with the
administrators of the Dillon -- or McCloud Health Care Center
in Dillon, South Carolina, a little town, Mr. President,
you've become quite familiar with. They told me that their
emergency room activities have doubled over the
past several years. They were looking for some
assistance to expand the size of that emergency room. When I began to question them as
to why, in this small county, not in my district, they
have had such a doubling, what it turns out is that they
told me that 31 percent of the people that they treat in that
emergency room are not there for emergencies; they are
there for primary care. Now, they said to me that some
of these people do not have health insurance, but many of
them do have health insurance but they cannot afford
the $1,500 to $2,000 deductibles that they would
have to pay if they were to go to a private primary
care provider. So they're now treating people
who have got employer-based health care that they cannot use
-- they are holding out for some catastrophic event. But
they need some assistance. Now, I think that no matter
what kind of plan you develop, there will be many
people left uncovered, and we need a safety
net for those people. I believe that the one way to
provide that safety net and to take care of all of those people
who may be uncovered and those people who have $2,000
deductibles with primary care is for a significant expansion
of community health centers. And we have not spoken
about that here today, but I know that your
proposal, Mr. President, I know that both the House and
Senate plans have that in them. And I do believe that that
is very, very important. We have more than a 40-year
experience with these health care centers, and I do believe
that no matter what we do there ought to be a significant
expansion of those health care centers. Secondly, Mr. President, a lot
of other things have been said about what I have on this paper,
but one other thing I would like to mention, and it has to do
with people who really cannot navigate the system,
people who work very hard, they know what they need for
themselves -- but I was reminded of that when we talked about
putting together restaurant owners who will design
plans for their members. I would hope that when we start
designing plans for the members of small businesses let's keep
in mind that the employees of those small businesses are
not negotiating these plans. They are at the mercy of
the small business owners. And the question is whether or
not the plans are sufficient that they will not fall into the
same category that these people with $1,500 to
$2,000 deductibles. And finally, Mr. President, this
morning I was doing one of these call-in shows on C-SPAN. A gentleman called in and
he was very, very emotional. He said to me that he was
getting ready to have transplant surgery, but he was told by the
hospital that because he's on Medicare, that his
post-operative treatment was going to be limited
to three years. After that, he would have
to find some way to pay. This man was very
emotional today. What we're doing
here fixes that, and I do believe that we ought
to really be honest with the American people when we talk
about what we are doing with Medicare. We are trying to make sure that
Medicare is there for that man and so many others who will find
themselves in his position. With that, I yield
back, Mr. President. The President:
Okay. I think this has actually
been a very useful conversation. What I'm going to do is
move on to the next topic, but maybe after we break
for lunch and come back, I want to go through some areas
where we decided we agreed and I know that abuse
is a good example; some areas where
we still disagree. One thing, Jon, you shook your
head when I said that people would be able to choose the
better plan because the notion was, well, people are mandated. Actually, any insurance that
you currently have would be grandfathered in
so you could keep. And so you could decide not to
get in the exchange the better plan -- I could keep
my Acme insurance, just a high-deductible
catastrophic plan -- I would not be required to get
the better one. If I chose to get
the better one, it would be 14 to 20 percent
cheaper than if I were going into the individual market. I just wanted to
clarify that issue. Senator Kyl:
Well, Mr. President, if I
could clarify, that's for a very limited period of
time, number one. Secondly, the incentives are set
up so that employers would drop you from their coverage because
it's cheaper for them to pay the fine than to continue
to pay the insurance, so they wouldn't be able
to keep what they have. And third, there are still
mandates in the legislation as to what you can do with what you
have such that it doesn't end up being the same coverage. So with all due
respect, I disagree. And it's just a fundamental
disagreement between us. Does Washington know best about
the coverage people should have or should people have
that choice themselves? Pay a little less, get
a little less coverage, or pay a little more
and get more coverage. The President:
Can I just say that,
at this point, any time that a
question is phrased as, "Does Washington know better," I
think we're kind of tipping the scales a little bit there since
we all know that everybody is angry at Washington right now. I think -- so it's a good way of
framing -- it's a good talking point, but it doesn't actually
answer the underlying question which is, do we want to make
sure that people have a baseline of protection. And this insurance market
reforms I think is a good additional example of what may
be philosophical differences but what we may have in common. Rather than go
through the problem, because I think everybody
understands out there the issue of people with preexisting
conditions not being able to get insurance, people coming up with
-- bumping up against lifetime caps and suddenly thinking,
as a family I met in Colorado, they thought their
child was covered. Suddenly they hit the lifetime
cap and they started having to scramble to figure out how
they'd pay the additional costs. We all are familiar
with these examples. I just want to go through areas
where I think we agree on insurance reforms, or at
least some Republicans and some Democrats agree. I think we agree on the notion
that you can't just drop somebody if they've already
purchased coverage. Looking at your bill, Jon, the
idea that you ban rescissions. We agree on the idea of
extending dependent coverage to a certain age. Some people say up to 25,
some people say up to 26, but we basically
agree on that concept. We agree on no annual
or lifetime limits. We agree philosophically that we
want to end the prohibition on preexisting conditions. I think the thing we're going
to have to talk about is, how do you actually
accomplish that? There may be a disagreement
as to whether you can do that without making sure that
everybody is covered, but that's something
that we can talk about. In addition, though, there are
some other insurance reforms that have been proposed by
the House and Senate in their legislation that I
think we should explore. And maybe we can narrow the gaps
there and come up with some -- even a longer list of
areas that we agree on. So what I'd do is, since I want
to make sure that Mitch doesn't give me a time
clock tally again, let me first go to Mitch and I
don't know who wants to make the presentation with respect
to insurance reform. Representative Boehner:
Mr. President, I'd like to yield
to Dr. Boustany to continue this conversation about
insurance reform. Representative Boustany:
Thank you, Leader Boehner, and thank you, Mr. President. I come at this as a physician, a
cardiovascular surgeon with over 20 years of practice
doing open-heart surgery, dealing with patients who have
come to me with very challenging cases at very difficult
times in their lives. And along with my colleagues,
Dr. Coburn and Dr. Barrasso, we bring a wealth of experience
in dealing with insurance companies and all these everyday
problems that so many American families face. We all agree -- we all agree --
that we need insurance reform. There's no question about it. The question is how do we do it. Now, we've all been through a
long year -- town hall meetings, telephone calls, e-mails
-- it goes on and on. And one thing that
has become very clear, the American people have spoken
out very loudly and very clearly. They want us to
take a step back, and go step by step with a
common-sense plan that really brings the costs down for
American families and small business owners. They want insurance companies to
treat them just like they treat big labor unions
and large companies. It's been a resounding message
we've heard over and over. So how can we achieve all this? Well, we've talked
about some of it. I think one of the things we
ought to really look at is how do you simplify, streamline, and
standardize all the paperwork that's involved -- because
I can tell you as a doctor, and my two colleagues who
are physicians will know, that it takes you away
from patient care. It interferes with the
doctor-patient relationship. It runs up cost in
medical practices. And it's a real issue. So I believe -- I think
we can all agree on that. We need to address that issue. A second area is how do you
really promote choice and competition. We've all talked about it and
I think we've had a lot of discussion already
on those issues. We put forth a plan earlier in
the year during debate that actually the Congressional
Budget Office showed that it brings down the cost of premiums
up to about 10 percent. And actually for individuals
seeking and families seeking insurance in the
individual market, those cost savings
could even be higher, as opposed to the bill we have
here where we've had some discussion already and Mr.
Camp has already outlined, as well as Mr. Kyl, that this
bill would actually raise premium costs. We've talked about small
business health plans. Again, I ran a small business;
it was a medical practice. And when I wanted insurance when
those premiums were going up in double digits every year,
I'd call an insurance agent, they would come in, and we had
very limited choice -- very limited. And the costs kept going up. Small business health plans is
one way to really deal with this and allow for pooling. And where our big
disagreement is, frankly, it's with how you do it. And if you create a plan with
exchanges that are overly restrictive, it really doesn't
-- it defeats the purpose. And I believe we can have faith
in the American public to figure out, if it's transparent enough,
what's their best deal -- what's the best deal for a small
business owner or a family in this sort of arrangement? The same goes for purchasing
insurance across state lines. I'm glad to hear our Democratic
colleagues agree that this is an approach that needs to be
taken to promote choice and competition. But again, we feel that this
bill restricts those options too much. And we think we can do
it in a responsible way. I believe we probably could
come together on this, but I think the existing
proposals restrict it far too much. Health savings accounts
-- these are very, very popular among small
business owners and families. And I think the one impediment
today is the inability to save enough in these. And I think there are ways that
we could promote these health savings accounts and promote
real savings that will actually make a difference. It won't solve all the problems,
but it's an important insurance reform that I think small
businesses will really, really jump on if we could
expand those savings opportunities. The current bill,
as has been stated, adds some restrictions and some
additional tax provisions on these, which make
them less palatable. We all agree on prohibiting
insurance companies from arbitrarily cancelling
insurance policies. That's a no-brainer; there's
strong agreement on both sides of the aisle there. Now, with regard to
preexisting conditions, this is an issue that is very
difficult and many of us and our families may have
been faced with. I can tell you I faced it when
I closed my medical practice, because I had a
health condition, an arthritis condition. And I went through the same
insurance carrier that covered my small medical practice for 14
years and got a big red no -- "can't insure you
or your family." And that's frankly unacceptable. Now, what we propose
is using risk pools, expanding these risk
pools, and reinsurance. It's an affordable way to do it. It creates certainty for a
family that's faced with this very difficult set
of circumstances. Certainty is important. And our plan would not raise
premium costs extravagantly, whereas the proposal here would
raise those costs and it doesn't really create the kind of
certainty a family needs because there are waiting lists and that
proposal is only temporary to something else and we don't
know what it's going to be. The other thing we do is we
create a way for small business owners to actually shop and
compare apples to apples -- transparency -- and
this is critical. Our plan does this without
creating the kinds of restrictions that we see
with the exchange process. And we agree that we have to
eliminate annual and lifetime caps, so we have
broad agreement there. So, again, I think it's clear
that the American people have rejected the bills that have
gone through so far because they see increases in
premiums for families, they see that it raises taxes
significantly on families, and raids Medicare to
create a new entitlement. This doesn't really
bring down the cost; this is really not the answer. What American families want is
a common step -- a common-sense step-by-step approach that will
really lower the costs for families and small businesses. I believe we have a duty
to reform health care, but we have an obligation
to get it right. The President:
Okay. Thanks, Charles. We're going to go to George
Miller -- and if you want to respond to some specific things
that Charles raised or make some more general points. We'll then go back
to a Republican. At some point in this discussion
-- and we're going to have to be a little more disciplined in
our time in order to stay on schedule on this section -- at
some point I'd like Secretary Sebelius, who is not only a
former governor but also an insurance commissioner, to
address some of the issues that have been coming up around
insurance and minimum payment. Senator Baucus:
Mr. President, I don't
know if anybody -- we weren't told of what
the time limits are. The President:
Well, I'm trying to be flexible. Senator Baucus:
I know, I'm just curious
if you've got a certain amount of time in mind. The President:
We've got about half an hour
remaining for this section. So if people can keep
their points brief. Senator Reid:
Mr. President, from the
Senate we have Senator Harkin and Rockefeller to
respond for the Democrats. The President:
Right. And I've
got a list. George. Representative Miller:
Thank you very much. This issue of insurance reform
is I think where most families intersect with their
insurance companies, with the health security
of their families. And let's start out with our
commonalities in the bill that Congressman Boehner -- Leader
Boehner, offered on the floor. He agreed that lifetime
caps should be abolished, that annual caps
should be abolished, that young people should be able
to stay on their parents' plan -- I think it was 25, I
think, and your suggestion, Mr. President, it's 26. So there's that kind
of commonality there. But we think -- and our bill
goes further than some of the suggestions you've made in the
interim since the House and Senate have passed these bills
-- is that clearly we think that preventative care should
not carry a co-pay with it; that we ought to encourage
people to get that kind of preventative care
for themselves, certainly for their children. We allow the health savings
accounts to continue. That's a variation, as my
colleague talked about, what they think insurance
reforms should reflect. Clearly now when we see the
request in California for a 38 percent increase and in Michigan
for a 56 percent increase, I think in Maine it's
27 percent increase, you've suggested stronger
language than we have in either the House or Senate bill -- I
think along the lines with what Senator Feinstein has been
talking about in terms of rate review. People are trapped
in these systems. But the one area where there
still seems to be disagreement -- it was not in the substitute
offered by the Republicans when we were on the floor -- and that
is this question of preexisting conditions because this is
a real trap for families, either because you find out that
you need to go to get care for a disease or an illness and you
may get a check-up and they may discover that you
have arthritis, but you didn't disclose you
had arthritis so now that's a preexisting condition and
you may lose that policy; you may have to provide more. And the fact of the matter is
-- you hate to admit this at my age, but I sit here with
two artificial hips, a little bit of arthritis,
and I have a kidney stone. (laughter) I'm dead in that
insurance market if I have to switch policies or switch
companies or look for another chance. Now, why should that be? Those hip replacements have been
with me for 15 years and I have no trouble. But it's a way of
denying me care. And if you have acne, it's
a way of denying you care. In fact, as you see from one of
the Blue Cross companies here -- there's three pages of things
that will keep you out of care, will keep you from
changing your jobs, and it goes on and on and on
with those -- back pain will keep you, a preexisting
condition; acne, that I mentioned; a cleft palate
that we talked about earlier here. So what does that mean when
you want to change jobs; what does that mean when you
want to start your own company? It means you go without
insurance or you pay some policy that has a $5,000 deductible
or $7,000 deductible. This is a real issue
to American families. Fifty-six million people right
now have insurance policies where preexisting conditions
can knock them out at any given time. We know that 13 million people
were denied coverage over the last three years because
of preexisting conditions. And so now you're trapped, you
have a preexisting condition; you can continue maybe -- maybe
-- with that insurance company if you pay more, but you can't
go -- you can't shop in the marketplace for another
insurance company, you can't go from Blue Shield
to Kaiser because you have a preexisting condition. You start to see the economic
trap and uncertainty that families are confronted with. Now, the interesting thing
was, during these negotiations Senator Dodd and I worked
very hard on these issues. Most of the business community
signed off on getting rid of these preexisting conditions. And I think that that's
important for us to understand, that that is what real
insurance reform is about. Should you still be able to
charge women more than men? Should you rate
based upon gender? To what extent can you
rate based upon ages? Where do you -- what's the
essential benefit that we're providing? We can all describe that plan
that's really inexpensive but just doesn't have many benefits
that go with it for families. And so I think that this is a
very important part of this discussion. I know when I go home to my
district I hear about this from the people I represent. I hear about this from my wife
and she's talking about our kids and her friends and people
she spends time with, how they struggle with these. And what we're really talking
about is the manipulation to move people around within
the insurance market. And yes, you can go to a
high-risk pool; so yes, because you have a
preexisting condition, because I have two
artificial hips, I can go to the most expensive
insurance system in the country. I'm now in a high-risk pool and
I'm trapped in that high-risk pool forever. You can make it a high-risk
pool among states, you can make it a high-risk
pool among small businesses, you can make it a high-risk pool
among large businesses -- I'm still trapped in the most
expensive insurance because of something that happened to me
that I had no control over: I have a child with
a cleft palate. I have a child with acne. How can this possibly be? Now, fortunately, in our
discussions, as I said, a lot of the business
organizations have agreed that these things should be
phased out over time. Some can be put in right away --
it's not terribly expensive to cover people 18 to 26, and that
can be done right away and we have that commonality. So I would just hope that we
would focus on this issue of what real insurance reform looks
like with respect to the impacts on families and individuals
as they try to navigate this insurance market. The President:
Thank you, George. Representative McCain:
Well, thank, Mr. President, and thank you for doing this. And I understand
the four categories, but there's a big category that
the people in my state and across this country, are
deeply concerned about, and that's not just the product
that we are examining today, the 2,400 pages, but the process
we've gone through to reach that. Now, both of us during the
campaign promised change in Washington. In fact, eight times you said
that negotiations on health care reform would be conducted
with the C-SPAN cameras. I'm glad more than a year
later that they are here. Unfortunately, this product was
not produced in that fashion. It was produced
behind closed doors. It was produced with unsavory
-- I say that with respect -- deal-making: the
Louisiana Purchase, fining them $300
million for one state; the "Cornhusker Kickback,"
which has, I understand now, been done away with. One of the things that -- as
provisions of this legislation that was particularly offensive
was the carveout for 800,000 Florida seniors exempt from
cuts in Medicare Advantage program. There's 330,000 seniors under
Medicare Advantage in my home state of Arizona. They're deeply
concerned about that. They're deeply concerned about
the carveouts for Vermont, Massachusetts, Hawaii, Michigan,
Connecticut -- $100 million for a hospital in Connecticut. Why should that happen? They don't understand it. And at the town hall meetings
that I conduct all over my state, people are angry. We promised them change in
Washington and what we got was a process that you and I both said
we would change in Washington. So then we got into
the special interests, whether it be the Hospital
Association or the AMA or others. And one of them that was
particularly egregious -- and I won't go through the
whole list -- was PhRMA. PhRMA got an $80 billion deal
and in return for which they ran $150 million worth of ads in
favor of "health reform." Their over $2-million-a-year
lobbyist was here at the White House and was reported to say in
the media "a deal is a deal." And part of that deal was that
there would not be competition amongst pharmaceutical companies
for Medicare patients. The other, among others, was
that the administration would oppose drug reimportation
from Canada, a proposal that you supported
in the United States Senate. And the Christmas -- The President:
John, can I just say -- Representative McCain:
Can I just finish, please? And then at Christmas Day --
I believe it was Christmas, the Majority Leader said, "A
number of states are treated differently than other states. That's what legislation
is all about. That's compromise." "Compromise" is not
the word for that. So when my constituents and
Americans now who overwhelmingly reject this proposal, say, go,
back to the beginning -- they want us to go back
to the beginning. They want us not to do
this kind of legislating. They want us to sit down
together and do what's best for all Americans, not just for some
people that live in Florida or happen to live in
other favored states. They want a uniform
treatment of all Americans. So I hope that that would be an
argument for us to go through this 2,400-page document, remove
all the special deals for the special interests
and favored few, and treat all Americans the same
under provisions of the law so that they will know that
geography does not dictate what kind of health care
they would receive. I thank you, Mr. President. The President:
Let me just make
this point, John, because we're not
campaigning anymore. The election is over. Representative McCain:
I'm reminded of that every day. (laughter) The President:
Yes. So we can spend the
remainder of the time with our respective talking points
going back and forth. We were supposed to be
talking about insurance. Obviously I'm sure that Harry
Reid and Chris Dodd and others who went through an exhaustive
process through both the House and the Senate, with
the most hearings, the most debates on the floor,
the longest markup in 22 years on each and every
one of these bills, would have a response for you. My concern is, is
that if we do that, then we're essentially back on
FOX News or MSNBC on the split screen just arguing
back and forth. So my hope would be that we can
just focus on the issues of how we actually get a bill done.
