The President:
All right, Joe, let's talk about cost because -- and now we're not talking about cost to families but we're talking about deficit, how much respective ideas cost. I think this is a good place to talk about Medicare as well because it's been brought up several times.
Joe, go ahead. The Vice President:
Mr. President, I'll try to be brief. There's a lot to talk about. I'd like to focus it though on the deficit, impact on the deficit which we're all talking about. And I must tell you, maybe I've been arount too long, but I am always reluctant, after being here 37 years, to tell people what the American people think. I think it requires a little bit
of humility to be able to know what the American people think. But -- and I don't, I can't
swear I do. I know what I think, I think I
know what they think, but I'm not sure what they think. And the second point I'd make
is, this probably has an echo -- this is slightly off point, but
this debate about the philosophic differences echo the
debate that probably took place in the mid-'30s on Social
Security -- it was mandated. And it was mandated because
everybody knew you couldn't get insurance unless everybody was
in the pool. And they knew if only some
people were in the pool, what would happen is a lot of people
when they got old we would take care of them anyway and you'd
have to pay for them. So it's kind of a -- it's not
the same thing, I'm not making the exact, but it's the same
philosophic debate that took
00:01:41.967,00:01:26.934
place back in the '30s. But, look, I think, if I can lay
out, Mr. President, what I think we all agree on, and then figure
out whether as a way to deal with the deficit end of this --
bending the cost curve, to use a phrase you and many others have
used, Mr. President. First of all, everybody agrees
we have the finest docs and the finest hospitals and the finest
nurses in the world, and we don't have quite enough of them
but we have the finest. Everybody also agrees, I got
from this morning but I think we had before, that Senator Coburn
is right that we waste a heck of a lot of money and that
somewhere around a third of all the dollars we spend on Medicare
is -- goes for nothing useful. The third thing it seems -- I
assume we can all agree on is that over the last decade costs
have doubled for health care in America -- costs have doubled
for government-provided health care, but everybody's
health care. And that that meant that right
now everybody knows that that wrecks budgets, it wrecks state
budgets, it wrecks family budgets, it wrecks federal
budgets. Every 35 cents of every dollar
spent on health care is spent by the federal government or the
state governments for Medicare and Medicaid -- 35 cents on the
dollar. That doesn't count veterans and
other things, just those two. And so -- and what's happened is
-- on the dollar, on every health care dollar. And so we're facing, all of us
around this table, Democrat and Republicans, are facing the fact
that there's $919 billion now we're spending on Medicare and
the federal portion of Medicaid, and that if things -- I don't
see any firewall is going to keep costs from doubling again,
we're going to be talking about in the year 2019 we're going to
be spending $1.7 trillion if we don't do
something to bend that curve. And the fourth point I think we
can agree on is that whether you agree how it was arrived at, CBO
has gone out and scored the various plans as to whether or
not they'd bend the cost curve, and everybody is acting
in good faith. John's plan, they've gone out
and points out over 20 years it will -- and I don't know if
that's the Republican plan or John -- I don't think there's
any one plan that is out there, but John's plan cuts those costs
by $300 billion over 20 years, according to CBO. The Senate plan cuts it by over
a trillion dollars over 20 years; $100 billion over 10. Again, we can argue on the
margins, but the fact is it's not just CBO that said this --
you had the Business Roundtable/Hewitt study that
shows that the Senate plan slows growth by 15 to 20 percent and
that business costs per employee by the year 2019 would be $3,000
less per employee. Again, it may be wrong -- it may
be wrong-exact amount, it may be $3,800, it may be $2,200 -- but
it cuts costs. And so it seems to me that there
is -- and I might add, that in the process here, it wasn't part
of the -- specifically part of a long-term debt debate, but, you
know, as has been pointed out here, we're not cutting Medicare
benefits in this; we're trying to eliminate the third of the
problem that's a waste. And as Senator Enzi, who I have
an inordinate amount of respect for, points out, he said it'd be
nice if we put some of these savings back into Medicare. Well, the fact is we do. We closed the prescription drug
doughnut hole. We provide for preventative care
for seniors because they don't have now without a co-pay. And we also -- it's everyone --
I think most every major study agrees that it's going to extend
the life of Medicare trust fund, and it changes -- these changes,
the actuarial group pointed out, would save about $200 on a
premium per Medicare recipient out there, the people who are
paying. So look -- and the source of how
we do this is getting rid of waste, making sure that we don't
overpay insurance companies for Medicare Advantage. I want to remind everybody about
Medicare Advantage, because some of us around here -- probably
all of us around this table were here when it got put in. What was the rationale for
Medicare Advantage? The rationale for Medicare
Advantage a decade ago was that private insurers could provide
insurance -- better insurance -- cheaper than the
government can do it. They can do it better. And we said the reason why we're
going to pay them more than what they're going to give at the
front end is to incentivize them to get into business
of doing it. And so we paid them a $1.15 for every dollar's worth --
what we could have bought for a dollar. We did that -- and it was a
rational thing to try -- we did that because we wanted them to
get engaged in the business we thought government didn't do as
well as the private sector did. Well, here we are. We're overpaying insurance
companies about 15 cents on the buck that we could buy for a
dollar, and we call for eliminating that. And so the other point I'd make,
Mr. President, is that we're in a situation here where at the
end of the day nobody in this room -- I don't think anybody in
this room -- is going to say, you know something, we are
really going to be reforming the health care system without
affecting the effect on the long-term deficit. Unless we bend that cost curve,
we're in trouble. And Mr. President, we can argue,
which we will, about whether or not the way you and I want to go
after dealing with the long-term debt, whether commissions make
sense, whether or not we're ever going to deal with -- this is a
big entitlement, this is a big entitlement. Medicare -- it exists. We've got to figure out how to
keep it from bankrupting the country without denying seniors
what they're entitled to in a nation like ours: decent health
care that provides for their needs. So I'd like us, Mr. President --
and I'm going to hush -- I'd like us to talk about, if we
can, specifically what we all agree on. What do we do about bending the
cost curve? What's the best way to do it? And I yield the floor. Representative Boehner:
Mr. President, Mr. Ryan is going to open this conversation on
behalf of us. Representative Ryan:
Look, we agree on the problem here, and the problem is health inflation is driving us off of a fiscal cliff. Mr. President, you said health
care reform is budget reform. You're right.
We agree with that. Medicare right now has a $38
trillion unfunded liability. That's $38 trillion in empty
promises to my parents' generation, our generation, our
kids' generation. Medicaid is growing at 21
percent this year. It's suffocating state's
budgets. It's adding trillions in
obligations that we have no means to pay for it. Now, you're right to frame the
debate on cost and health inflation. And in September when you spoke
to us in the well of the House, you basically said -- and I
totally agree with this -- "I will not sign a plan that adds
one dime to our deficits either now or in the future. " Since the Congressional Budget
Office can't score your bill because it doesn't have
sufficient detail, but it tracks very similar to the Senate bill,
I want to unpack the Senate score a little bit. And if you take a look at these
CBO analysis, analysis from your chief actuary, I think it's very
revealing. This bill does not control
costs. This bill does not reduce
deficits. Instead this bill adds a new
health care entitlement at a time when we have no idea
how to pay for the entitlements we already have. And let me go through
why I say that. The Majority Leader said the
bill scores as reducing the deficit $131 billion over the
next 10 years. First, a little bit about CBO. I work with them
every single day. Very good people, great
professionals, they do their jobs well. But their job is to score what
is placed in front of them. And what has been placed in
front of them is a bill that is full of gimmicks and smoke and
mirrors. What do I mean when I say that-- Well, first off, the bill has 10
years of tax increases, about half a trillion dollars, with 10
years of Medicare cuts, about half a trillion dollars, to pay
for six years of spending. Now, what's the true 10-year
cost of this bill in 10 years? That's $2. 3 trillion. It does a couple of other
things. It takes $52 billion in higher
Social Security tax revenues and counts them as offsets, but
that's really reserved for Social Security. So either we're double-counting
them or we don't intend on paying those Social Security
benefits. It takes $72 billion and claims
money from the CLASS Act -- that's the long-term care
insurance program. It takes the money from premiums
that are designed for that benefit and instead counts them
as offsets. The Senate Budget Committee
chairman said that this is a Ponzi scheme that would make
Bernie Madoff proud. Now, when you take a look at the
Medicare cuts, what this bill essentially does is treats
Medicare like a piggy bank. It raids a half a trillion
dollars out of Medicare not to shore up Medicare's solvency but
to spend on this new government program. Now, when you take a look at
what this does, it is -- according to the chief actuary
of Medicare, he's saying as much of 20 percent of Medicare's
providers will either go out of business or will have to stop
seeing Medicare beneficiaries. Millions of seniors who are on
-- who have chosen Medicare Advantage will lose the coverage
that they now enjoy. You can't say that you're using
this money to either extend Medicare solvency and also
offset the cost of this new
program. That's double-counting. And so when you take a look at
all of this, when you strip out the double-counting and what I
would call these gimmicks, the full 10-year cost of this bill
has a $460 billion deficit. The second 10-year
cost of this bill has a $1. 4 trillion deficit. And I think probably the most
cynical gimmick in this bill is something that we all probably
agree on. We don't think we should cut
doctors 21 percent next year. We've stopped those cuts from
occurring every year for the last seven years. We all call this here in
Washington the "doc fix. " Well, the doc fix, according to your numbers cost $371 billion. It was in the first iteration of
all these bills. But because it was a big price
tag, and it made the score look bad, made it look like a
deficit, that provision was taken out, and it's been going
on as stand-alone legislation. But ignoring these costs does
not remove them from the backs
of taxpayers. Hiding spending does not reduce
spending. And so when you take a look at
all of this, it just doesn't add up. And so let's just -- I'll finish
with the cost-curve. Are we bending the cost curve
down or are we bending the cost curve up? Well, if you look at your own
chief actuary at Medicare, we're bending it up. He's claiming that we're going
up $222 billion -- adding more to the unsustainable fiscal
situation we have. And so when you take a look at
this, it's really deeper than the deficits or the budget gimmicks or the actuarial analysis. There really is a difference
between us. And we've been talking about how
much we agree on different issues, but there really is a
difference between us. And it's basically this: We
don't think the government should be in control of all of
this. We want people to be in control. And that, at the end of the day,
is the big difference. Now, we've offered lots of ideas
all last year, all this year, because we agree the status quo
is unsustainable. It's got to get fixed. It's bankrupting families. It's bankrupting our government. It's hurting families with
preexisting conditions. We all want to fix this. But we don't think that this is
the answer to the solution. And all of the analysis we get
proves that point. Now, I will just simply say this
-- and I respectfully disagree with the Vice President about
what the American people are or are not saying, or whether we're
qualified to speak on their behalf. So we are all representatives of
the American people. We all do town hall meetings. We all talk to our constituents. And I've got to tell you, the
American people are engaged. And if you think they want a
government takeover of health care, I would respectfully
submit you're not listening to them. So what we simply want to do is
start over, work on a clean sheet of paper, move through
these issues step by step, and fix them and bring down health
care costs and not raise them. and that basically the point. The President:
I'm going to call on Xavier Becerra, but I just want to follow up on a couple
points. There are some strong
disagreements on the numbers here, Paul, but I don't want to
get too bogged down. First question I have is whether
your side thinks Medicare Advantage is working well,
because I think it's important just to point out that -- when
we keep on talking about cuts in Medicare, what we're really
talking about is what Joe alluded to, which is a decision
was made a while back to set up a system in which Medicare
costs, let's say, a dollar under the government program that 80
percent of people still use and are perfectly satisfied with and
there's no showing that it's not working for them. We said we'd give it to private
insurers and we'd give them a bonus of a $1. 15 for every dollar in the
normal plan. And it turns out that people
aren't healthier because of that extra $15 -- or 15 cents. It's estimated that it's costing
us about $180 billion over 10 years and, say, $18 billion a
year. And essentially what my proposal
would do, and what the House and Senate proposals would do, would
say, instead of having the insurance companies get that
money, let's take that money -- the savings are between $400
billion and $500 billion a year -- and let's devote some of that
money to closing the doughnut hole, which has already been
talked about. Seniors who need more
prescription drugs than Medicare currently is willing to pay for
hit this gap where suddenly they've got to use it out of
pocket, and they just stop taking the drugs, or they break
them in half, or what have you. Let's fill that. That costs around $30 billion a
year, or $300 billion. And let's make some other
changes that would result in actually the 80 percent of
seniors who aren't in Medicare Advantage getting a better deal. So we can address some of the
broader issues, but I just want to focus on Medicare Advantage
because I haven't seen an independent analyst look at this
and say seniors are healthier for it or taxpayers are better
off for it. That's what we're talking about
reforming. We're not talking about cutting
benefits under the Medicare program as is required under
law. What we're talking about is
Medicare Advantage. And it may be that some people
here think that it's working. I know that there are some
Republicans who are sitting at this table who don't think it's
working. You can argue and say, okay,
let's not do Medicare Advantage and let's not close the doughnut
hole, for example, or there may be other ways you want to spend
that money. But I just want to establish
whether we've got some agreement that the Medicare Advantage
program, which is what we are proposing to reform, is actually
not a good deal for taxpayers or for seniors, and certainly not a
good deal for the 80 percent of seniors who aren't in Medicare
Advantage, because, by the way, they're paying an extra premium
of about 90 bucks a year to subsidize the 20 percent who are
in Medicare Advantage. SENATOR McConnell:
Mr. President, John McCain also would like to address that
issue. THE PRESIDENT:
I'm sorry, so if somebody else wants to address SENATOR McCain:
I'd just make one comment. Why in the world then would we
carve out 800,000 people in Florida that would not have
their Medicare Advantage cut? Now, I proposed an amendment on
the floor to say everybody will be treated the same. Mr. President, why should we
carve out 800,000 people because they live in Florida to keep the
Medicare Advantage program and then want to do away with it? The President:
I think you make a legitimate point. Senator McCain:
Well, maybe -- The President:
I thank you. Senator McCain:
Thank you very much. (Laughter. ) The President:
I'm going to Xavier -- in fairness, I asked a question, so I'm going to let
one of the Republicans respond, and then I'll go to Xavier. Senator Coburn:
You know, the assumption -- I think it's important for the American
people to hear we have Medicare Part D, except no senior
in this country ever paid a tax dollar for it. And we're talking about filling
a doughnut hole on a program that they're already benefiting
from that's going to leave $11 trillion in debt for our
children. I'm not sure the seniors want us
to leave more debt for their children to fill a doughnut
hole. And when we talk about filling
the doughnut hole by taking away from people who can't afford to
buy a supplemental policy, that's where Medicare Part A
helps poor people in Oklahoma, is they get to buy Medicare Part
C -- we never call it Part C, but that's what it is -- and
they don't have to buy a
supplemental policy. So consequently, they get lots
of the benefits that other people who have better buying
power in Medicare with a
supplemental policy. So it's a tradeoff of whether or
not we say, where are we going to give the benefits. What we really should be doing
is saying, we're broke, Medicare is broke; we're working and
struggling together to try to get there. Let's not add new benefits
anywhere, and let's make sure the benefits that we have today
get applied more equitably. The President:
Well, I think that's a legitimate point. I would just point out that 80
percent of seniors are helping to pay in extra premiums
for the 20 percent who are in this
Medicare Advantage. And it's not means-tested, so
it's not as if the people who are in Medicare Advantage are
somehow the poor people who can't afford supplementals. It's pretty random. And what we also know is, and I
just want to point this out, Tom, $180 billion of it is going
to insurance companies. It's not going to seniors. It's going to insurance
companies, including big insurance company profits --
without any appreciable improvement in health care
benefits. That's not a good way for us to
spend money. I agree with you about the fact
that the prescription drug plan added to our deficits, because
we didn't pay for it. And I just have to point out
that didn't happen under my watch. That happened under
the previous Congress. There's some people -- John is
an example of somebody who was true to his convictions and
didn't vote for it. Senator Coburn:
I didn't vote for it. The President:
But the fact of the matter is, is that
that was costly. And we do have to
deal with that. On the other hand, that -- the
problem I don't think is, is that we gave seniors
prescription drug benefits. I think the problem is, is that
we didn't pay for it. And we should try to find a way
to pay for it. Taking some of that money out of
Medicare Advantage and putting it into that doughnut hole does
pay for it. I really breached protocol here,
but I thought that was important to just get clear. We are taking about Medicare
Advantage in terms of where these cuts come from, not
Medicare benefits through the traditional Medicare Plan. Xavier. Congressman Becerra:
Mr. President, thank you very much for bringing
us all together. And I do want to address
something that my friend, Paul Ryan said, because I almost
think that we can't have this discussion any further without
addressing something Paul said. Paul, you called into question
the Congressional Budget Office. Now, we can all agree to
disagree, we could all have our politics, but if there's no
referee on the field, we can never agree how the game should
be played. Congressman Ryan:
Let me clarify, just to be clear. Congressman Becerra:
No, no. Let me -- let me -- if I could
just finish. And so, I think we have to
decide do we believe in the Congressional Budget Office or
not, because Paul, you and I have sat on the Budget Committee
for years together. And you have, on any number of
occasions in those years, cited the Congressional Budget Office
to make your point, referred to the Congressional Budget
Office's projections to make your points. And today, you essentially said
you can't trust the Congressional Budget Office. Congressman Ryan:
No, that is not what I'm saying. Congressman Becerra:
Okay, well, that was my interpretation. Congressman Ryan:
No. Let me be clear. Congressman Becerra:
I apologize. I apologize if
I misinterpreted -- Congressman Ryan:
I am not questioning the quality of the scoring -- Congressman Becerra:
Paul -- Paul, if I could just finish my -- Congressman Ryan:
-- I'm questioning the Congressman Becerra:
I take your point on your clarification.
But if I -- Congressman Ryan:
Let me just say it, 10 years of tax increases, 10 years of
Medicare cuts to pay for six years of spending -- Congressman Becerra:
Paul, if I could just try to make my point. Congressman Ryan:
Okay. Congressman Becerra:
So then I'm assuming then that you do believe that the CBO is a
legitimate agency to render decisions on spending for the
Congress. Congressman Ryan:
Xavier, you know I believe that. Congressman Becerra:
Okay, so then let's work with that. Because, quite honestly, if we
can't work with CBO numbers, we're lost; we're lost. Because then we really will get
into a food fight. And so, I apologize, Paul, if I
misinterpreted -- Congressman Ryan:
Yes, look -- Congressman Becerra: -- what I
had heard, I appreciate that we left the referee on the field. Congressman Ryan:
I'll just simply say -- Congressman Becerra:
And so if the referee is on the field, then we have to at least accept
what the referee has said. And the referee said that the
bills that are before us reduce the deficit, the federal
government's deficit, by over $100 billion in the first 10
years. The Congressional Budget Office,
the referee -- not political parties; the referee -- said
that these bills reduce the deficit in the succeeding years,
after the first 10 years, by over a trillion dollars. Now, you're right. All the discussion makes it
clear it wasn't easy. There are going to be some
savings that we extract out of Medicare. What we do do in these bills is
try to make the point that as we reduce the deficit, we're not
going to put the onus, the burden of those cuts on seniors
who receive Medicare. We're asking the providers to
stop, as some of my colleagues in the Senate said,
over-utilizing or over-spending in services, so that we don't
see someone having four different X-rays for chest pain. And so what we're trying to do
is figure out the ways to reduce the costs without
impacting benefits. In fact, that's how in these two
bills that the Senate and House passed, we were actually able to
close the doughnut hole for prescription drug coverage in
Medicare and still extract, according to the CBO, over
$100 billion in savings. So, Mr. President, I would just
say the thing that I would love for us to get into the details
of, in terms of those deficit reductions that are made is the
fact that we do it while putting the brakes on Medicare
overpayments that went to insurance companies, which were
getting reimbursed at greater levels than were doctors and
hospitals that relied on a traditional Medicare fee for
service, to provide services to our seniors. We have any number of provisions
that deal with the issue of fraud, which (inaudible) says at
least a total of $60 billion. And working with some of our
Republican colleagues, we are doing exactly that, going after
the waste that's in the system, certainly the fraud. And that's how we extract the
number of the savings. And, finally, perhaps one of the
unsung secrets of what we learned from listening to
doctors and hospitals and all the different providers is that
we can actually do a far better job of coordinating care for
people. And if you make sure that
someone who walks in the door of any one of the great physicians
who are in this room when they were practicing and made sure
that we followed them through not just that first visit to the
primary care or family doctor, but then into the specialist and
then into the hospital and then afterwards to perhaps the
nursing home or the home health center, that what you do is if
you coordinate the care instead of have each provider do just
its share and forget about the patient, if you coordinate the
care, you can actually reduce costs dramatically. And that's how we were able to
reduce the costs for Medicare. That's how we were able to
extract, according to the referee on the field, the
Congressional Budget Office, over $100 billion in deficit
reduction and over a trillion dollars in deficit reduction in
the second 10 years. So I believe, Mr. President,
what we have is a chance to discuss how we can actually put
this country back on a good fiscal track and still do right
by our seniors in Medicare and increase the amount of people
who get covered by health insurance by about 31 million. Senator Grassley:
First of all, to clarify something, if anybody says that Medicare Advantage is
a subsidy going to insurance companies, let me say what the
statute says. The statute says that 75 -- with
a big differential where it goes -- 75 percent goes to
beneficiaries and benefits and 25 percent to the federal
government. The President:
I'm sorry, Chuck, I just want to make sure -- I don't think that's -- that
doesn't sound right to me because that would mean 100
percent of it is going to either benefits or the federal
government, which means the insurance companies aren't
making any money there. Senator Grassley:
No, 75 percent to beneficiaries and benefits and 25 percent to the federal
government. We consider -- I consider CBO
"God" around here because it takes 60 votes in the Senate to
overrule them so I'm not questioning CBO, but in regard
to what Mr. Ryan said, I want to back it up with a quote from a
December 23rd letter from CBO about this double accounting: "The key point is that the
savings to the health insurance trust fund under" the bill
"would be received by the government only once, so they
cannot be set aside to pay for future Medicare spending and, at
the same time, pay for current spending on other parts of the
legislation." Then skip a couple sentences
and say: "To describe the full amount of the HI Trust Fund
savings as both" -- with emphasis upon "both" --
"improving the government's ability to pay future Medicare
benefits and financing new spending outside of Medicare
would essentially double-count a large share of those savings and
thus overstate the improvement in the government's fiscal
position. " Now, you can argue about the
exact amount of savings or whether there isn't any savings,
but you can't argue that you can't count a dollar twice --
you just can't argue that. Common sense tells you that. You don't even have to have an
accountant tell you that. Now, I think what we want to
remember here is that there are consequences to things we do. You change tax policy and
there's consequences to tax policy. You decide you're going to save
money in certain areas -- there's consequences to that. So we have big tax increases. I think that without a doubt
when you put tax on labor it's harmful and it doesn't do
anything to create employment. Both bills hit small business
with higher tax rates -- the House bill by 33 percent; the
Senate bill by 20 percent. The House bill hits small
business harder, obviously; the Senate bill hits the middle
class harder. It's a fact that when you do
these things, you hurt the economy because small business
is the machine that brings employment in America -- 70
percent of new employment. We've got to be careful of how
you treat small business. And small business can be -- the
health care needs of small business can take -- be taken
care of with these association health plans and other things
that can be done to make it beneficial. Thirty-five states have
high-risk pools. Most of them, 150 percent is the
maximum cost. So you can build on those
high-risk pools to take care of people that have needs,
particularly those that would be hit by the mandate and might not
be able to afford the insurance without the high costs. The high cost of this
bill comes from an unconstitutional mandate. It comes from the fact that for
the first time in the 225-year history of the country, the
federal government is telling you, you got to buy something. That just doesn't make sense to
a lot of people at the grassroots of the Midwest. And if you think I don't listen
to my people, I've had 32 town meetings so far this year. I think I have a good
feeling of what's out there at the grassroots. Now, we have unrealistic cuts in
here -- not unrealistic from the standpoint of the way
CBO scored them. Not at all. CBO is
God around here. They say -- we give them
policies that are going to save X number of dollars, it's going
to save X number of dollars. But do you think that we're
going sit around in rural America, or even in urban --
downtown urban America, in the poverty parts of the city,
that we're going to let hospitals close down? And they raise the concern about
access to health care. No, we aren't going to reduce
benefits for seniors at all. But when you put our health care
institutions and our delivery system in jeopardy, well, people
-- you're going to promise people health care they aren't
going to get. If you're going to put 14 -- I
don't know whether it was 14 or 18 million people under this
bill -- into Medicaid -- Medicaid pays about, in my
state, I think about 60 or so percent. Medicare pays 80
percent of cost. Doctors don't take Medicaid. So you're going to promise 14 to
18 million people in Medicaid that they're going to be
covered. But if you don't have doctors to
service them, isn't that a little bit intellectually
dishonest, to promise something that you can't deliver on? And so there are these things in
this bill -- Medicare, Medicaid cuts that -- I don't see any
future Congress having any more guts than we do to close a rural
hospital. So I think that you got to take
into consideration -- you've got to take into consideration the
consequences of the acts or the unproven promises of cuts that
aren't going to materialize. That's just the way I see it. And working in those 31
meetings, hundreds of hours of meetings with Senator Baucus, I
learned a lot about health care. Now, we didn't get a bill out of
that bipartisan effort, but I'm sure glad I spent all that time
there because I learned a heck of a lot about our health care
system that I wouldn't have
otherwise known. The President:
Thank you, Chuck. I'm going to go to Kent next. I just want to make one point. If the notion is, is that we
can't make some hard decisions about how entitlements work
because it's just not realistic, nobody is going to have the guts
to do it, then we're in big trouble, because that means that
the federal budget and state budgets and then business
budgets and family budgets are all going to be gobbled up by
this thing. So I hope that in fact we've got
the courage to make some of these changes. Now, when I say that Medicare
Advantage is not a useful way for us to spend tax dollars to
provide health care to seniors, at least the way it's currently
structured, as I said, that's not a Democratic idea. I mean, there are a whole bunch
of Republican commentators and some of the folks who've sat
around this table before who suggested that that's probably
right. You can make an argument that
whatever savings we get out of Medicare Advantage should not go
to filling the doughnut hole, for example. That's a legitimate argument. You can make an argument
that it should go just to deficit reduction. Those are all legitimate
arguments. But my point is that the savings
that are obtained here are from a program in which insurance
companies are making a lot of money but seniors who are in
these kinds of programs are not better off, and the 80 percent
of the people who are [not] in these programs are paying an
extra 90 bucks a year to subsidize the folks
who are in them. And that just doesn't seem like
a good deal for them or for the taxpayer.
Kent Conrad. Senator Grassley:
Would you give me 30 seconds, please? The President:
Sure. Senator Grassley:
I think we've already had it laid out here in four or five different ways how
a heck of a lot of money could be saved. And I think that those things
that we can agree on we ought to
proceed on. But I think that it's legitimate
to take into consideration that if you're going to have program
cuts that CBO says out there in the second decade could be 15 to
20 percent a year -- that you got to have a system left to
serve the people that we're promising health insurance to. And that's the point I'm making. The President:
But what I'm saying is, Chuck -- I think it's a legitimate point. What I'm saying is that on
Medicare Advantage, that does not have to do with the concerns
that you've got about hospitals or doctors getting properly
reimbursed. This is a program that's going
to insurance companies. But I want to make sure that
Kent gets in here, because Kent knows something about the budget
as the chairman of the Budget Committee. Kent. Senator Conrad:
Well, thank you, Mr. President. Thank you for allowing us to
come and visit about what really is the 800-pound gorilla facing
the federal budget, and that is the health care accounts of the
United States -- Medicare, Medicaid, and the rest. What we all know that is true is
the biggest unfunded liability of the United States is
Medicare. What we all know is true, as the
trustees have told us, Medicare is going to go broke in eight
years. So the idea that we don't have
to do anything about Medicare is utterly disconnected from
reality. The idea that we don't have to
find savings in Medicare is an admission that we are headed for
a fiscal cliff that we're going to go right over. And if we really want to
endanger the benefits to people who are getting Medicare, the
best way to do that is to do nothing, because if we do
nothing, we will guarantee that Medicare goes broke. So together -- we can either do
this together or we can have this imposed on us. I very much hope we do it
together. Senator Coburn, and I'm sorry --
did he leave? -- I'm sorry that he's not here,
because he said something that I thought was one of the most
important comments made here today, and something that I
think has gotten way too little attention, and that's
the question of those who are chronically ill. As we analyzed Medicare, we
found a startling statistic: 5 percent of Medicare
beneficiaries, 5 percent, use half of all the money. I think Paul knows this well. Five percent used 50 percent of
the money. Who are they? They're the chronically ill,
people who have multiple,
serious conditions. And I think Dr. Coburn was
really referencing that when he talked about the need to better
coordinate their care, because we are wasting massive amounts
of money and getting worse health care outcomes than we
could if we better coordinated their care. What do we mean by that? A study was done with 20,000
patients. They put a care coordinator on
each one of them. These are chronically ill
patients. And what they found was by
coordinating their care -- and the first thing they did, by the
way, is go into their kitchen tables, sit down, get out all
their prescription drugs; on average they found they were
taking 16. They found that by looking at
them they could eliminate eight. The result was hundreds of
thousands of dollars of savings per patient, better health care
outcomes. You know, I did this with my own
father-in-law in his final illness. Went to his kitchen table --
didn't know it was his final illness -- got out all his
prescription drugs. Sure enough he was taking 16. I get on the phone to the
doctor, I go down the list. Dr. Coburn, you were out of the
room -- I referenced you because you said something that really
triggered a thought in my mind that I think is important. Went down the list of what my
father-in-law was taking -- 16 prescription drugs. I get on the line to the doctor. He says, well, Kent -- I get
down to about the third one -- he shouldn't be taking that. He shouldn't have been taking
that the last five years. I get a little further down the
list, two drugs. He says, well, Kent, he
shouldn't be taking those two drugs. They work against each other. I said, doc, how does this
happen? He said, Kent, it's very simple. He has got a heart condition, he
has got a serious lung condition, he has got orthopedic
issues, he's got doctors for each one of those, he's getting
prescription drugs mail-order, he's getting them at the
hospital pharmacy, he's getting them down at the beach. He's sick and confused, his wife
is sick and confused, we've got chaos. And my conclusion, after all of
these hundreds of hours of hearings and meetings with
Senator Grassley and Senator Baucus we're part of and Senator
Enzi was, indeed we do. We have a system that is
characterized, especially for those people, by chaos. We can do better, and we really
don't have a choice, because we've got a debt now, a gross
debt, 100 percent of our GDP headed for 400 percent that
nobody believes is sustainable. So I just pray that we find a
way to come together and deal with these things seriously,
because if we don't, we will rue the day. The President:
It's a little bit -- I might -- I want to make sure that we're balancing off
time between Democrats and Republicans here. And House and Senate, as well. John, go ahead. Congressman Boehner:
Mr. President, I'm going to say thank you for having us here. I think it's been a useful
conversation. And as I listened to you open up
this meeting, I thought to myself, I don't disagree with
anything that you said at the beginning of the meeting, in
terms of the premise for why we're here. The American families are
struggling with health care. We all know it. The American people want us to
address this in a responsible way. And so I believe -- do say
thanks for having us all here. I think our job, on behalf of
our constituents and on behalf of the American people, is to
listen. And I spend time in my district,
I spend time in a lot of places. I've heard an awful lot. And I can tell you the thing
that I've heard more than anything over the last six or
seven months is that the American people want us to scrap
this bill. They've said it loud, they've
said it clear. And let me help understand why. First thing is we've just talked
-- we've heard from the two budget directors about our
fiscal condition. We have Medicare that's going
broke. We have Social Security that's
going broke. We have Medicaid that is
bankrupting not only the federal government, but all the states. And yet, here we are having a
conversation about creating a new entitlement program that
will bankrupt our country. And it will bankrupt our
country. It's not that we can't do health
insurance reform to help bring down costs, to help save the
system. This bill -- this 2,700-page
bill will bankrupt our country. And secondly, Mr. President, I'd
point out that I think this is -- this right here is a
dangerous experiment. We may have problems in our
health care system, but we do have the best health care system
in the world, by far. And having a government takeover
of health care, and I truly believe that's what this is, is
a dangerous experiment with the best health care system in the
world that I don't think we should do. So why did I bring
this bill today? I'll tell you why I brought it. We have $500 billion in new
taxes here over the next 10 years. At a time when our economy is
struggling, the last thing we need to do is to be raising
taxes on the American people. Secondly, we've got $500 billion
worth of Medicare cuts here. I agree with Kent Conrad. We need to deal with the problem
of Medicare. But if we're going to deal with
the problem with Medicare and find savings in Medicare, why
don't we use it to extend the life of the Medicare program as
opposed to spending that $500 billion, creating a new
entitlement program? But it's not just,
Mr. President, the taxes or the Medicare cuts. You've got -- you've got the
individual mandate in here, which I think is unwise and I do
believe is unconstitutional. You've got an employer mandate
in here that says that employers, you've got to provide
health insurance to the American people or you're going to pay
this tax. It's going to drive up the cost
of employment at a time when we have over 10 percent, or near 10
percent, unemployment in America. And beyond that, a lot of
employers are going to look at this and say, well, I'll pay the
tax. And they're going to dump their
employees into the so-called exchange, because in five years,
every American is going to have to go to the exchange to get
their health care. And who is going to design every
health care bill offered in the exchange under this bill? The federal government is going
to design every single health care bill in America within five
years, once this bill were to pass. I could go on and on and on. Let me just -- let me just make
one other point. I'll save you -- I'll save you
-- for 30 years, we've had a federal law that says that we're
not going to have taxpayer funding of abortions. We've had this debate in the
House. It was a very serious debate. But in the House -- the House
spoke, and the House upheld the language we have had in law for
30 years that there will be no taxpayer funding of abortions. This bill that we have before us
-- and there was no reference to that issue in your outline,
Mr. President, begins -- for the first time in 30 years, allows
for the taxpayer funding of abortions. So, Mr. President, what we've
been saying for a long time is, let's scrap the bill. Let's start with a clean sheet
of paper on those things that we can't agree on. Let's take a step-by-step
approach that will bring down the cost of health insurance in
America, because if we bring down the cost of health
insurance, we can expand access. Mr. President, I told you the
day after -- maybe it was the day you were sworn in as
President, that I would never say anything outside of the room
that I wouldn't say inside the room. I've been patient. I've listened to the debate
that's going on here. But why can't we agree on those
insurance reforms that we've talked about? Why can't we come to an
agreement on purchasing across state lines? Why can't we do something about
the biggest cost driver, which is medical malpractice and the
defensive medicine that doctors practice? Let's start with a clean sheet
of paper and we can actually get somewhere and we can get it into
law here in the next several months. The President:
John, the challenge I have here -- and this has happened periodically
-- is every so often we have a pretty good conversation trying
to get on some specifics, and then we go back to the standard
talking points the Democrats and Republicans have had for the
last year. And that doesn't drive us to an
agreement on issues. There are so many things that
you just said that people on this side would profoundly
disagree with and I would have to say, based on my analysis,
just aren't true, that I think the conversation would start
bogging down pretty quick. Now, we were trying to focus on
the deficit issue. And the fact of the matter is,
as we indicated before, that according to the Congressional
Budget Office, this would reduce the deficit. Paul has different ideas about
it. Other folks may think that there
are better ways of doing it. But right now what we're doing
is focusing on the issue of federal entitlements and whether
we can make some changes. I will come back to you I think
at the end of this session to answer a range of the questions
that you just asked. Right now what I want to do is
go to Jim Cooper, who I think everybody knows cares pretty
deeply about the federal budget. He's been championing this for a
very long time. Jim, do you want to address some
of the issues that have been raised in terms of both Medicare
and Medicaid? Representative Cooper:
Thank you, Mr. President. We're all here, we're dressed
up, we're on good behavior, but I think folks back home are
wondering how we behave when the camera is off. The deficit in my opinion is
probably the most single issue we face. Paul Ryan said it well -- health
inflation is driving us off a cliff. And I'm kind of intrigued by the
conversation because so far we've heard a lot of folks
trying to out-do each other in deficit reduction. I welcome that competition. Especially if it's backed up
with votes, because it's easy to talk tough on this; it's harder
to deliver. I personally like Senator
McCain's suggestion -- let's get rid of all the special deals. That's just a starting point. Paul Ryan is right again and Tom
Coburn is right when they point out that we're probably wasting
a third of medical spending. Medicare alone is $37 trillion
in the hole. And that means for all the folks
who want to talk tough and not vote tough -- that's not good
enough. It means that for all the folks
who want to do this next year or next decade or leave it to their
successor -- that's not good enough. We've had some examples of how
we've behaved recently -- a wonderful bipartisan measure,
the Conrad/Gregg bill, completely bipartisan for years
and a bipartisan, fiscal responsibility commission. Was brought up for a vote in the
Senate; we had the 60 votes, but only 53 people showed up for
work. Seven people who had been
original co-sponsors of that measure suddenly got different
ideas when the moment of truth came. So, Mr. President, I'm thankful
you appointed a presidential fiscal responsibility commission
with Alan Simpson and Erskine Bowles, to try to force us as a
Congress and force the nation to address these fundamental
problems. Because if you love Medicare,
you need to act to save it fast. Every day matters. A report will come out issued by
the Treasury Department -- it's come out every year; it will
come out in the next few days -- it's the only report that uses
real accounting to describe America's fiscal problems, and
the news is not pretty. It will reaffirm what's been
discussed here about Medicare and Medicaid and other vital
American programs being deeply in the hole. And the opportunity of cost for
delay is extraordinary. So we can face these problems,
Mr. President, we can solve them with political will, but the
talking points won't do it. We've got to acknowledge the
real questions. And as every businessperson in
America knows, if you can't measure it, you can't manage it. And too many people in the
federal government are refusing to measure it, much less take
the tough votes that are required. Because the reason we have a
Medicare Advantage program, Mr. President, as you know, is
in 2003 when the other party was completely in charge of
everything here, we passed a program that as has been pointed
out was almost completely unfunded and added $8 trillion
in one bill to our children andgrandchildren. Now, these benefits, if offered,
should be paid for. So this is a challenge for
everybody in both parties because nobody's hands
are clean in this. But let's have a new day, a new
beginning -- I think we could do this. And this bill is a great place
to start, because if you don't think this bill reduces the
deficit enough according to CBO, vote for more savings. If you want to reform Medicare
some more, vote for it -- don't just talk a good game. So I hope the American people
are watching because -- and they're going to be watching
after the cameras are turned
off, too. And I'm thankful you called this
meeting because this is a moment of truth for our country, and
together we can solve this
problem. The President:
I want to see if there are any Republicans who want to speak. I still have Dick Durbin. Senator McConnell:
Mr. President, I think John McCain. Senator Mccain:
Thank you, Mr. President. I say to my friend from North
Dakota, none of us want to do nothing -- but we do want to
start over. And we've just had a discussion
about the 800,000 carveout and all of the other special deals
and special interests that were included in this bill, which is
more than offensive. But I want to talk about one
specific issue on deficit reduction and that is medical
malpractice reform. Last year, Mr. President, you
said when you spoke to the Congress you asked your
distinguished Secretary of Health and Human Services to
look at ways that we could address the issue and then again
this year -- and I pay close attention to all of your
speeches. The President:
Thank you. That's more than Michelle does. (laughter) Senator McCain:
And the point is that we don't have
to go very far. There's two examples right now
of medical malpractice reform that is working. One is called California and the
other is called Texas. I won't talk about California
because we Arizonians hate California because they've
stolen our water. (laughter) But the fact is that
Texas has established a $750,000 cap for non-economic damages;
caps doctors at $250,000; hospitals at $250,000; and any
additional institution, $250,000; and patients harm to a
finding of medical malpractice are not subject to any
limitations on recoveries for economic losses. And I hope you'll examine it. But an important aspect of what
they've done in Texas is the following. Lawsuit filings are down. Defensive medicine increases
annual medical costs by 10 percent. They've saved -- physicians
recruitment is up. In the last two years 6,945 new
physicians have been licensed -- a 65 percent increase from two
years preceding their reforms; 31 percent increase in
recruitment of rural emergency medicine physicians. Amarillo lost 26 physicians in
the two years preceding the legislation; has gained 37. The largest malpractice
insurance company in the state slashed its premiums by 35
percent, saving doctors some $217 million over four years. There are now over 30 companies
competing for business. It's already there. Now all we have to do is enact
this into legislation and it's already been proven. So I don't think we have to
experiment around. There are two states that have
proven that you can enact medical malpractice reform and
you can have great savings and provide health care providers
with the incentives they need. And I would just like to finally
mention one other thing. There's an issue that's
overhanging this entire conversation -- we all know what
it is. It's whether the Majority Leader
of the Senate will impose the "reconciliation," the 51 votes. Now, having been in the majority
and the minority -- I prefer the majority -- I understand the
frustration that the majority feels when they can't get their
agenda through, and it's real and I understand it and I have
some sympathy. But I remember, and I think you
do too, Mr. President, the last time when there was a proposal
that we Republicans in the majority would adopt a 51-vote
majority on the issue of the confirmation of judges. There was a group of us that got
together, said, no, that's not the right way to go because that
could deal a fatal blow to the unique aspect of the United
States Senate, which is a 60 vote majority. And then we came to an agreement
and it was brought to a halt. If a 51 vote reconciliation is
enacted on one-sixth of our gross national product, never
before has there been -- there has been reconciliation, but not
at the level of an issue of this magnitude and I think it could
harm the future of our country and our institution, which I
love a great deal, for a long, long time. The President:
Okay. Let me just address two of the
points that you've made and then I'm going to turn to Dick. This issue of reconciliation has
been brought up. Again, I think the American
people aren't always all that interested in procedures inside
the Senate. I do think that they want a vote
on how we're going to move this forward, and I think that most
Americans think that a majority vote makes sense. But I also think that this is an
issue that could be bridged if we can arrive at some agreement
on ways to move forward. Medicare -- or the issue of
malpractice that you brought up, I've already said that I think
this is a real issue. I disagree with John Boehner
that -- John, when you say that it's the single biggest driver
of medical inflation, that's just not the case. The Congressional Budget Office
took a look at the proposal you've got for medical
malpractice and estimates that the government system would save
about $50 billion over 10 years, which is $5 billion a year --
which is real money but understand that we've got a $2
trillion system. Let's assume that you
extrapolate that into the private marketplace. Say it's another $5 billion or
another $10 billion. It's still a small portion of
our overall health inflation problems. But having said that, it's still
something that I care about and I've said I care about it. Now, not only have I asked
Kathleen to initiate some pilot programs at the state level, but
there are some examples of legislation that I actually
would be interested in pursuing. Tom Coburn, you and Richard Burr
have talked about incentivizing and allowing states to
experiment much more vigorously with ways to reduce frivolous
lawsuits, to pursue settlements, to reduce defensive medicine. That's something I'd like
to see if we could potentially get going. So I might not agree to what
John Boehner has proposed, and it's interesting that I think
I've heard a lot today about how we shouldn't have Washington
impose on the states ideas, except when it comes to the
ideas that you guys like, in which case it's fine to override
what states are doing. There seems to be a little bit
of a contradiction on this, but I think there may be a way of
doing it that allows states to tackle this issue in a very
serious way. And I'd be interested in working
with you, John, and working with Tom to see if we can potentially
make that happen -- if we can arrive at a package that also
deals with the other drivers of health care inflation that are
so important. Now, we're running out of time. I've got Dick Durbin, and then
what we're going to just do is go into coverage and that will
-- I know that Henry and John and Charles have been interested
in talking about it, and frankly is something that we haven't
spoken a lot about lately and that is a whole bunch of people
who just don't have health care. Go ahead, Dick. Senator Durbin:
Mr. President, I've been biding my time throughout this entire meeting. I thank you for inviting us on the issue of medical
malpractice. Before I was elected to
Congress, I worked in a courtroom. For years I defended doctors and
hospitals, and for years I sued them on behalf of people who were victims of medical
malpractice. So I've sat at both tables in a
courtroom. At least many years ago, I think
I kind of understood this area of the law better than some. But I listen time and again as
our friends on the other side, when they're asked what are the
most important things you can do when it comes to our health care
system in America, the first thing they say is medical
malpractice -- it's the first thing they say; today it was the
first thing that was said. The point that's been made by
the President is if we do believe the Congressional Budget
Office when Orrin Hatch asked them how much will we save if we
implement the Republican plan on medical malpractice
from the House, they said $54 billion
over 10 years. Five-point-four billion a year
is a lot of money, except in the context of a $2. 5 trillion bill that we pay each
year for health care. It represents one-fifth of 1
percent of the amount of money we spend each year on health
care. The Congressional Budget Office
said something else. They said, and as you lose
accountability for what the doctors and hospitals are doing,
more people will die -- 4,800 a year, according to the
Congressional Budget Office's reference to this study. Now, the Institute of Medicine
tells us 98,000 people a year die in America because of
medical malpractice. I think there are things that we
have put in this bill to change that. Most of you have heard of this
Dr. Gawande. We've read him. I've talked to him on the phone. His checklist manifesto is a
very basic approach to reducing medical errors, which is what we
should be focused on. And I want to say,
Mr. President, I think what you and the Secretary have done is
the right thing -- incentivizing states to find innovative ways
to reduce medical errors and reduce those lawsuits that
should not be filed. But let me tell you what,
limiting the recovery for pain and suffering for someone who is
entitled -- entitled, because they are innocent
victims to be paid -- isn't eliminating junk lawsuits. I will tell you that as far as
the President is concerned, in his neighborhood there is a
great hospital, which I will not name. And at this hospital, a woman
went in for a simple removal of a mole from her face, and under
general anesthesia, the oxygen caught fire, burning her face. She went through repeated
surgeries, scars, and deformity. Her life will never be the same. And you are saying that this
innocent woman is only entitled to $250,000 in pain and
suffering. I don't think it's fair. Our jury system makes that
decision. And the states -- 30 of them -- have made a decision
on what to do. If you were asked a basic
question, over the last 20 years, has the number of paid
malpractice claims in America doubled or been cut in half? If you listened to most people,
you'd say they must have doubled. No. According to the Kaiser Foundation, they've been cut in half. Oh, but how about the money
that's being paid for these malpractice claims? Clearly, that's going through
the roof. No. Between 2003 and 2008, the total
amount paid for malpractice claims in America
was cut in half, from $8 billion to $4 billion. This is an important issue. I don't dispute it. And I think we have treated it
as an important issue. But to make it the overriding
issue, is to I think really trivialize some of the other
things that should be part of this conversation. I have been asked to speak about
deficit reduction. I will not, other than to say
one general thing. When I hear my friend, John
Boehner, say that we have the best health care in the world, I
don't dispute it for a moment. If I were sick, this is the
country I want to be in -- with these doctors, these hospitals,
and these medical professionals. But step back for a second and
look at who we are in this room. As was said many years ago, the
law in its majestic equality forbids both the wealthy
and the poor from sleeping under
bridges. When it comes to the wealthy and
health care, per capita we're the wealthiest people in
America. The Federal Employees Health
Benefit program, administered by the federal government, setting
minimum standards for the health insurance that we enjoy as
individuals and want for our families is all we're asking for
in this bill for families across
America. If you think it's a socialist
plot and it's wrong, for goodness sakes, drop out of the Federal Employees
Health Benefit program. But if you think it's good
enough for your family, shouldn't our health insurance
be good enough for the rest of
America? That's what it gets down to. Why have this double standard? Tom Harkin is right. Why do we continue to
discriminate against people, when we know that each one of us
is only one accident or one diagnosis away from being one of
those unfortunate few who can't afford or can't find health
insurance?
