President Obama Delivers Remarks on Economic Recovery at Town Hall Meeting
Wednesday, July 29, 2009; 4:22 PM
[*] OBAMA: Thank you very much. Thank you.
Thank you so much. Thank you, everybody. Please have a seat. I want to thank Jay for the wonderful introduction.
I want to thank all the Kroger's employees and managers who are just being great hosts to us today.
I was just telling Jay, this is the first time I've been in a grocery store in a while.
They don't let me do my own shopping, but I miss it. So I may pick up some fruit on the way out.
I just wanted you to know.
There are a few other people I want to acknowledge. David Dillon, the Kroger CEO, is here. Where -- where -- where did -- where did Dave go? There he is over there.
Vera Lewis (ph) is the UFCW shop steward (ph) at Bristol Kroger. Where's Vera?
Hey, Vera (ph).
A few people that I want to acknowledge, Mayor Jim Rector is here. Give the mayor a big round of applause. Good to see you again, Mayor.
A few folks who could not be here, but I want to give them some great acknowledgement, your outstanding governor, Tim Kaine, your senator, Mark -- your senators Mark Warner and Jim Webb.
And I want to give a special shout-out to my friend and your congressman, Rick Boucher.
He couldn't be here today. Rick couldn't be here today. He's working hard in Washington as we speak, but he was an early supporter of my campaign, he's an important voice in our efforts to reform our health care system, he's a leader in guaranteeing that clean-coal technology is a part of our clean-energy future, and is going to create jobs all across the country and right here in this area.
So I just want you all to know I love Rick Boucher, so give him a big round of applause, even though he's not here.
(APPLAUSE) Now, this is a -- this is a town hall meeting, so I don't want to spend all my time talking up front. I want to listen to you and answer your questions. But I just want to give some brief remarks at the front end.
It is wonderful to be back in Bristol, back in Virginia, a state that's been good to me. I don't know if you guys remember. I know the mayor probably remembers. This is the first town that I visited in the general election after I had won my party's nomination. So, in my mind, at least, this is where change began.
And that's why I've come back: to talk with you about how we're going to deliver on that promise of change. I don't want to, as I said, talk too long, because I do have to take some questions from you, and also Michelle's probably e-mailing me about grabbing some milk on the way home.
Now, I don't know if any of you noticed it. Maybe they're selling Newsweeks by the check-out stand, but the latest cover of Newsweek says, quote, "The Recession is Over." Now, I bet you found this news a little startling. I know I did, because obviously people are going through a tough time all across the country.
What is true is, is that the economy has stopped going through the freefall that we saw at the beginning of the year. The market is up. The financial system is no longer on the verge of collapse. We got news yesterday that, for the first time in three years, housing prices had actually gone up.
When I took office, we were losing jobs at nearly double the rate that we're losing them now. So we may be seeing the beginning of the end of the recession.
But, as I said before, that's little comfort to the folks who've lost their jobs and haven't found another one. Virginia is weathering this recession a little bit better than many of the other states. I would like to think that some of that has to do with the great leadership here in Virginia.
But unemployment even in Virginia is now over 7 percent. And too many Virginia families are being crushed by health care premiums that have doubled over the past nine years, something I want to talk about in a minute.
So we know the tough times are not over. But we also know that, without the steps that we took early on, six months ago, our troubled economy and the pain it's inflicting on Virginia's families would be much worse.
So let me just run through a few facts.
When my administration came into office, we were facing the worst economy in our lifetime, worst economy since the Great Depression. We were losing an average of 700,000 jobs a month. It was nearly impossible to take out a home loan, or a car loan, or a student loan, or loans for small businesses to make payroll and keep their doors open. And economists across the ideological spectrum -- left, right, center -- they all thought that it was possible we might tip into another Great Depression.
At the time, there were some who thought that doing nothing was an option. I disagreed. I thought we had to act boldly and firmly. So we took steps to end the housing crisis and avert the collapse of our financial system.
And less than one month after taking office, we enacted the most sweeping recovery package in history, and we did so without any of the earmarks, pork-barrel projects that are usually accompanying these big -- these big bills.
OBAMA: Now, there's a lot of misinformation out there about the recovery package, so I just want to get the record straight. To date, roughly quarter -- a quarter of the recovery plan's funding has been committed, over 30,000 projects have been approved, and thousands have been posted online as part of our effort to be transparent and accountable when it comes to economic recovery.
The recovery plan is made up of three parts. The first part, about a third of the Recovery Act, is all about tax cuts for you and the customers here at Kroger. For Americans struggling to pay rising bills with shrinking wages, we kept a promise that I made during the campaign to put a middle-class tax cut in the pockets of 95 percent of working Americans.
Ninety-five percent of working Americans are getting a tax cut. It started about three months ago. You may not have noticed it, because it's coming in your paycheck each time you get one. And it's spread out over the course of the year. And in addition, small businesses also received tax cuts, so about a third of the stimulus package or recovery package was actually tax cuts to help folks pay their bills, whether it's shopping here at Kroger's or paying their electricity bill or being able to pay down some credit card bills that they already had, all of which help to stimulate the economy and boost demand. That was about a third of it.
Another third of the recovery package or the stimulus bill was to help people and states who had fallen on hard times because of the tremendous financial crisis.
So for Americans who were laid off -- and some of you probably know folks who were laid off -- we expanded unemployment benefits, and that measure has already made a difference in the lives of 12 million Americans and about 150,000 folks right here in Virginia; 150,000 people have extended unemployment insurance.
And we're making health insurance 65 percent cheaper for families who are relying on COBRA while they're looking for a job. Everybody know what COBRA is? Anybody ever been on COBRA or tried to access COBRA? This is a -- a program that allows you to keep your health care premiums, pay them, if you lose your job.
But here's the only problem: If you've lost your job, a lot of times you can't afford your premiums. And so what we did was we said we'd pick up 65 percent of those premiums so that people, even if they lost their job, could still keep their health care. And we provided assistance to the states who were facing historic budget shortfalls, and that saved jobs and protected essential services. That meant that you didn't have to lay off teachers, you didn't have to lay off police officers or firefighters.
In Virginia, that meant 13,000 staff are still working in your children's schools that otherwise would have been laid off. More than 300 deputy sheriffs are still keeping your communities safe. And state colleges and universities like Virginia Tech haven't had to raise tuition as much as they otherwise would have.
So that's two-thirds of the recovery is tax cuts for you and help for people who've lost their jobs, are losing their health care, or for states so that they don't have to lay off teachers and cops and firefighters and other essential services. That's what this recovery package was all about.
Now, the last third of the recovery package was making vital investments that are putting people back to work, but are also going to create a stronger economy in the future.
We're already seeing the results of these investments, including upgrades to community health centers across southwestern Virginia and right here in Bristol, allowing them to serve more patients in need of more care.
And all across Virginia and this country, we're rebuilding our crumbling roads, our highways, our bridges as part of the largest new investment of infrastructure in America since Eisenhower built the Interstate Highway System back in the 1950s.
Now, a lot of this is going to take time to complete. And it's not solving all of our problems all at once. But we are stabilizing this economy and moving it forward in part because of the actions that we're taking.
We're not going to rest, though. I'm not going to rest until everybody who wants to find a job can find a job. But there's little debate that the steps that we've taken in the first six months helped to stop this economic freefall.
This has all cost some money to do, although I've got to admit, when I hear some of the critics talking about out-of-control spending, I can't help but remember those are the same critics who contributed to the $1.3 trillion deficit that I inherited when I walked in. They basically handed me a bill for $1.3 trillion and said, "Here, fix it," and now they're on TV saying, "Why haven't you fixed it yet?" in the middle of the greatest recession since the Great Depression.
So we've got to keep this in perspective. But what is true is, because of the significant debt and deficits that we have, a lot of people are saying we can't go any further in tackling some of our long-term problems, and we especially can't do health care. And I understand why people feel like they've got to cut back, and why shouldn't government have to cut back, as well? Is now really a time for government to wade in and try to do something about health care? I think it is, and let me tell you why. Part of the reason that we're doing this town hall here at Kroger is because Kroger provides health insurance to its associates, as many as it can, and that is significantly different than a lot of companies out there who aren't providing health insurance for their employees.
In some cases, it's not because they don't want to. It's because they can't afford to. And the fact of the matter is that health care is going up so fast that I hear from small businesses and large businesses alike that say it's unsustainable. Our costs are going up 20 percent a year or 30 percent a year just on health care costs.
So what happens? Over time, either employers start pushing more costs onto their employees in the form of higher premiums and higher deductibles and other out-of-pocket costs or they just stop providing health insurance altogether.
That's why, even if you've got health insurance, you've got a stake in making sure that we can turn this system around. Premiums are going up one-third faster than wages. Your out-of-pocket costs are going up 62 percent.
We spend $6,000 more per person on health care in this country than any other nation on Earth. We're not getting a good deal for the amount of money that we're spending.
And I said this the other day: If somebody told you that you were spending $6,000 more on the car that you bought than your neighbor, you'd be pretty annoyed and you'd say, "I want to get a better deal," and yet we don't do the same thing when it comes to health care. We don't get the best deal that we can, and that's why we've got to reform it.
Let me just talk a little bit about what exactly we're trying to do and what it will mean for you. First of all, no one is talking about a government takeover of the health care plan. As I was driving up, I saw some signs. You know, some folks -- folks were all riled up. You know, they're listening to certain radio programs or watching certain cable shows, and so somehow I guess they think we're just going to take over health care.
I've tried to say this over and over again: If you're happy with your health care, you're happy with your doctor, we're not going to force you to change it. Kroger's is providing health care to its employees, then we're not going to change that system.
What we are going to try to do is work with Dave and others to see if we can control the costs so that they can keep on providing health care at an affordable cost to all of you. But we're not going to be changing your system if you're happy with what you've got.
Under the reform that I've proposed, if you like your doctor, you'll keep your doctor. If you like your health care plan, you will keep your plan.
Now, if you're one of 46 million Americans who don't have health care coverage, you'll finally be able to get quality, affordable coverage.
Now, what a lot of chatter out there hasn't focused on is the fact that, for people who have health insurance, oftentimes they're still not getting a very good deal. And the reforms that we're proposing will help make dealing with insurance companies a little -- little bit easier for the American people.
Let me give you some examples. Right now, we have a system that works well for the insurance industry, but it doesn't always work for its customers. What we need and what we will have when we pass these reforms are health insurance consumer protections to make sure that those who have insurance are treated fairly and insurance companies are held accountable.
Let me be specific: We will stop insurance companies from denying you coverage because of your medical history, because you've got a pre-existing condition.
I'll never forget watching my mother on her hospital bed dealing with cancer trying to argue with health insurance companies, even though she'd been paying her premiums, saying that her cancer was a pre-existing condition, even though it hadn't been diagnosed when she first got her insurance.
And I said then, and I continue to believe, that that's not right. And I'll bet many of you have heard of somebody or maybe have experienced yourself that same kind of situation.
OBAMA: With reform, insurance companies will have to abide by a rule that says they can't drop you just because of a pre-existing condition. And that also means, if you lose your job or if you change jobs or if you decide to start your own business, that you're not prevented from getting health insurance. That will give you some security, especially in a tough economic situation.
With reform, insurance companies will have to abide by a yearly cap on how much you can be charged for out-of-pocket expenses. No one in America should go broke because they're sick.
We'll require insurance companies to cover routine checkups and preventive care, like mammograms and colonoscopies or eye and foot exams for diabetics. That way we can prevent illnesses instead of just paying for them when they're going to the emergency room because they get really sick.
No longer will insurance companies be allowed to drop or water down coverage for somebody who becomes seriously ill. It's not right; it's not fair.
And we're going to stop insurance companies from placing arbitrary caps on coverage that you can receive in a given year or in a lifetime.
So whether or not you have health insurance right now, the reforms we seek will bring stability and security that you don't have today. And those reforms become more urgent each year.
Now, back in Washington, there's been a lot of talk recently about the politics of health care. Now, they've been saying, "Well, Obama's got to get this done for his political survival."
Listen, first of all, I've already got health care. Second of all, I'm only six months into a four-year term. I'm not thinking about the politics of this thing right now.
I'm thinking about the fact that, if we do nothing, then I can guarantee you your premiums will double, more and more people will lose coverage, business profits will be strained, which means that Dave will be able to hire fewer people, and our federal budget is going to blow up because most of the growth in our federal budget, it's not on pork projects. It's not on some government spending plan. Most of the growth in the federal budget, the biggest reason for our long-term deficit is Medicare and Medicaid spending, by far. It's not even close. And if we can't control the rate of inflation on health care, then it doesn't matter -- I could eliminate every single non-defense program out there. You'd still have a huge deficit.
The only way we get control of this is if we control our health care costs. And that's why this is so important.
But I'm confident that we're going to get it done. And we're going to get it done because of you, because I think the American people, even though sometimes they're a little suspicious of what goes on in Washington, you know, recognize that when we meet a challenge, we don't shy away from it.
This is a major challenge, getting this economy back on track, fixing our schools, making sure we've got an energy plan that makes us energy independent for the future, and that we fix our health care system so that our families are secure and that our economy is stronger.
So I hope I can count on your help. I appreciate all you hosting us today. And with that, what I want to do is just start taking some questions.
Thank you very much, everybody. Thank you. All right.
So what I'm going to do is I'm -- what I'm going to do is I'm just going to call on people as they raise their hand. I'll go girl, boy, girl, boy so that people don't think I'm biased.
And we've got at least one young lady and one gentleman here who have microphones so that -- please introduce yourself and -- when I call on you. And if you can stand up so everybody can see and hear you, I will try to answer your question.
This gentleman right here in the front? You can go ahead and let it go.
OBAMA: Right. Right.
OBAMA: Well, you know, you are exactly right that we've got Medicare right now that covers people 65 and older. And seniors are very happy with Medicare, and rightfully so. In fact, by the way, this week is the 44th anniversary of Medicare being put in place.
And you should know that the same arguments that you're hearing now about health care reform you were hearing back then about Medicare. Everybody was saying, "This is socialized medicine. Government's taking over. This is terrible."
OBAMA: Now -- now the senior citizens will tell you, they are very satisfied with Medicare, except for one exception, and that is prescription drugs, because there's still a donut hole. I'll talk about that in a second.
So there is -- you could say, well, why don't we just include everybody under Medicare? The problem we have is, first of all, the majority of people still get health care through private insurers and, if we -- if all we did was take the uninsured and put them into Medicare, then the costs would be so high that we couldn't pay for it, because Medicare is a pretty expensive program.
Part of what we want to try to do is to actually change how the delivery systems in Medicare work to make it a little bit more efficient and to squeeze out some of the waste in it. I'll give you an example.
Under Medicare, we spend about $177 billion -- that's with a B -- in subsidies to insurance companies who participate in something called Medicare Advantage. It's like Medicare, except private insurers manage it. And my attitude is: Why are we giving $177 billion to insurance companies that are already profitable? We can use that $177 billion to cover more people...
... which seems like a pretty sensible thing to do.
So it may be that over time what we look at is, who's eligible for Medicare? And are there ways that we can include some people who currently don't qualify?
But right now, what we've proposed is to, instead of using Medicare as a model, use the kind of model of the health insurance that members of Congress have, which is not a bad deal, and basically set it up so that there's something called a health insurance exchange.
If you didn't have health insurance right now, what you could do is you could go to this exchange, you could select the plan that you thought was best, which is what members of Congress do, and then you'd get a subsidy to help pay for your premiums. And because you're part of a big pool of customers, you then will have leverage and negotiating power with the insurance companies to drive down those costs so that you can afford health care and it's high quality. And we're going to make sure that the insurance companies have to abide by the rules that I just talked about. They can't prohibit you from joining because of a pre-existing condition. If you lose your job, you can still keep your health insurance, all those things that will give you some more security.
What I want to do is not replace the private insurance system, but I do want to make sure that folks who -- who don't have access to it because they don't work for a good company like Kroger or they just work for a small business that wants to give them health insurance but can't afford it, that they're able to get the same good deal, OK?
Young lady right here. You can just pass the mikes down. It's hard to get through the aisle here.
QUESTION: (OFF-MIKE) is this a plan that you would be willing to put your family on?
OBAMA: Yes. I mean, as I said, this is a plan that's similar to what I had when I was a member of Congress.
You know, the federal employees benefit plan is -- the way it basically works is, is that you have sort of a menu of options. You can choose the plan that you think is best and then, you know, you pay your premium.
Now, as a member of Congress, you know, I was making more than a lot of people are, so I didn't need a subsidy. We would have to provide some help for people so that they could afford the premiums. But the idea that you've got a big pool that gives you then leverage, and the insurance companies have to compete for you, that makes sense.
I also think one of the choices that you should be able to choose from is what's called a public option. Now, this has gotten a lot of people riled up, because they say, "A-ha, see, this is government- run."
When you hear people talking about us wanting to create a government-run health system, all they're really talking about is what we were -- what we've proposed is, to have an option that is non-for- profit, it's set up by the government, and can keep administrative costs low, and can keep insurance companies honest, because if you've got -- if the insurance companies started jacking up their rates real high, then you could go into the public option, and that -- and, you know, those private insurers would start losing a lot of people, so they'd have to compete for you.
I think that's a good idea. Some people disagree with me on this. But in terms of quality of care, yes, I would actually sign up.
Now, I've got to admit -- just in the interests of full disclosure -- as president, I've got this doctor who follows me everywhere, seriously, and an ambulance. And so, you know, I don't want to pretend like I don't have super-duper care. But I don't think that lasts after I leave.
So -- all right. It's a guy's turn now. The gentleman right here?
QUESTION: Hello, Mr. President.
OBAMA: How are you, sir?
QUESTION: Good. I'd like to welcome you to Bristol, the birthplace of country music and the fastest half-mile track.
OBAMA: Fantastic. There you go.
QUESTION: It's an honor to have you.
OBAMA: I think the last time I was here, wasn't Jimmie Johnson here? I'm trying to remember. I think -- I mean, he came backstage to talk to me. But, anyways, so -- I know a little bit about racing.
Go ahead. Oops. Is it still working?
OBAMA: There you go.
QUESTION: Thank you. I've been fortunate to work for a company for 36 years that does have health care, but the last two contracts that my union has negotiated, we settle health care business first. If there's anything left, we get a little raise. If we don't, we don't.
What do you propose to -- or how can you think we could force other companies to be as responsible? When I go to the emergency room, I don't have to pay three times the cost, because other companies are carrying the same burden that Kroger is carrying, and the -- all the cost is not passed on to us.
OBAMA: Right. Well, you make a terrific point. OK, so -- so let me -- let me talk about this just for a second.
One of the reasons that a lot of Americans aren't sure whether we should reform the health care system is they've got health insurance right now and they're thinking, "You know what? As long as I've got it, I just don't want to see any changes to it."
What they don't realize is that the costs are going up for their employers at such a high rate that they are not getting raises, higher wages or higher incomes because that money is all going into health care.
Now, you -- if -- if you're collectively bargaining as a member of a union, then you realize that, because you're in the negotiations, and the employer puts it in front of you and says, "Look, what can I do? Our health care costs just went up 20 percent. Here's my margins. Here's my profit. I just don't have enough money to give bigger raises." And so -- but a lot of people don't realize that. This is one of the reasons, by the way, that wages and incomes have been flat for everybody except the top wealthiest Americans over the last 10 years. Even before this recession hit, people were not getting raises; they weren't getting higher wages and incomes partly because a lot of it was being gobbled up by health care.
So if we can control health care costs, that will free up more money for higher wages, higher salaries, but you're right that part of controlling costs is making sure that we're not paying for other folks who don't have health insurance, because their employers aren't doing the right thing.
Now, that's very important.
I -- I won't name any names, but I think it's fair to say that there are some Kroger's competitors that aren't providing the same levels of health care. That undercuts your business, but it also means that those folks -- a lot of times, they're going on Medicaid, which you pay for out of your taxpayer dollars, or they just don't have health insurance and they show up at the emergency room to get care, and the hospitals, because they've got all this uncompensated care, they jack up everybody else's insurance premiums to help cover their costs.
So one way or another, we are all paying for other companies not providing health insurance. So here's what we've said.
What we've said is, small businesses -- look, a mom and pop shop, they've got three employees, four employees. We just want to make it easier for them so they can join this exchange that we just talked about. We'll provide them some tax credits so they can help provide health insurance for their employees.
But if they're companies of a certain size that are making a certain profit and they're still not providing health insurance to their employees, then what we're going to do is say, you know, either you pay or you play. If you're providing health insurance, that's great, and we're going to help you. But if you're not providing health insurance, then you need to pony up a little bit of money to help pay for the fact that somebody somewhere is going to be taking care of your employees' health care.
OBAMA: And I think that's only fair, and that will kind of level the playing field between Kroger's and some of its competitors. All right?
OK. Young lady right here.
QUESTION: Thank you, Mr. President. My name is Charlotte Norman (ph) from Bristol, Tennessee. I have a mother that is -- will soon be 90 years old. And it's obvious that I'm a senior, too.
Rumor has it that, if we get this new health care system in, that we won't get the health care, our doctors and all, that we have now, that virtually people -- older American citizens will just be put out to pasture. Please tell me that isn't so.
OBAMA: It isn't so. I mean, I don't know...
Look, nothing burns me up more than hearing some of these scare tactics directed at seniors, you know, because seniors, they're vulnerable, and they get worried about some of this stuff, and they get some, you know, crazy flier in the mail, and, you know, they get scared that they might lose their -- their care.
So let me just be absolutely clear: Medicare is in place and, as long as I'm there, and even long after I'm gone, Medicare will continue to be in place.
We're not going to -- we're not going to mess with Medicare. The only thing, as I said, that we want to do is to try to make Medicare a little more efficient, because the problem we've got right now is Medicare is running out of money, for the same reason that health care systems generally are really having problems. The costs are going up faster than the amount of revenue that's coming in.
If we don't do anything, then Medicare is going to be in the red in about eight years. Think about that. Only eight years from now, Medicare is going to be in the red. So what we've said is, let's make it more efficient, let's work with doctors, let's work with hospitals to figure out, instead of taking five tests if your mom has something that she needs to -- to check out with a doctor, instead of her having to take a trip to the doctor, he takes a test, then he calls her later, says, "This is what I think's wrong with you, so I'm referring you to a specialist," she's now got to take another trip to another doctor. Because they didn't send the other test forward, she's got to take another test.
Why not just have her make one visit, have all the doctors show up at that one visit, take that one test, diagnose her right there? That's what really good health care systems do, but not enough of them are doing it, and a lot of them don't have computers that can send the test results electronically so that they don't have to take multiple tests.
There are a whole range of things that we can do to make the system more efficient. That's number one.
The second thing she should like, depending on how much she uses prescription drugs, we pay 77 percent more for prescription drugs -- we as Americans pay 77 percent more than any other country on Earth. Think about that, 77 percent more than Canada, than France, than Mexico.
Now, why is that? The drug companies will tell you, well, it's because we invent a lot of these drugs and we put a lot of money into research and development. That might be true for about a third of the difference.
The other third of the difference just has to do with the fact that they market a lot, they pay for all those TV ads, they don't give discounts at the same rate, and we don't negotiate with them. When they passed the Medicare prescription drug plan, they didn't negotiate with the drug companies for the cheapest available price.
So what we've said is, let's negotiate. If we're -- if taxpayers are paying all this money to drug companies, the least they can do is give taxpayers a good deal under Medicare.
And to their credit, the pharmaceutical companies have already agreed to put up $80 billion -- they've put it on the table. They said, "We will help use this to close the so-called donut hole that, you know, is really causing a lot of seniors a lot of grief."
I don't know if everybody knows what the donut hole is, but after you hit a certain level of prescription drugs out of Medicare, suddenly you stop getting help out of the Medicare plan until, you know, you've spent several thousands of dollars that a lot of seniors can't afford it.
So they end up cutting their medications in half, which aren't as effective, or they just don't take their medications at all if they can't afford it that month. And that's not good and, by the way, ends up being more expensive, because if they're not taking their medications, they may end up in the emergency room and we'll all have to pay more anyway.
But just tell your mom, nobody's messing with her doctor, nobody's messing with her Medicare, and people should not believe all this stuff they heard about -- I got one letter from a woman. She said, "I don't want government-run health care. I don't want your socialist plan. And don't touch my Medicare."
And I -- you know, I had to write back to her. Ma'am, you know, Medicare is a government program. But don't worry: I'm not going to touch it. But, you know, sometimes folks get stirred up without necessarily having all the facts available to them.
So a gentleman's turn, the gentleman right here.
QUESTION: Mr. President, you've already just finished covering one of the things I was going to talk about, and that is the drug manufacturers charging us so much more.
QUESTION: The other thing -- there's only been a couple of states, Texas being one of them, that have passed tort reform. And I think one of the other reasons that medical practice is going up so is because of the malpractice insurance. And if I think we have some really good laws governing tort reform, that should help a great deal, too.
OBAMA: Well, I appreciate the comment. I am actually in favor of figuring out ways to lower malpractice insurance for doctors, because in some cases it's way too high, especially for OB/GYNs, neurologists.
You know, there are some specialties where they've got to pay $250,000 every year for their insurance, and it doesn't make much sense, and in -- in rural communities or, you know, communities where generally the cost of living is lower, it means that you just don't get a lot of people going into those communities who are OB/GYNs and neurologists, because they just can't -- their incomes can't support the insurance. So it's a problem.
I have to tell you, though. I actually asked a bunch of health care experts about this: Is the reason that costs are going up because of malpractice -- high malpractice costs and what they call definitive medicine? You know, you're doing -- doctors are doing five tests because they're worried that they might get sued if they don't do those tests.
And it turns out that the evidence at least is that that is a very small, maybe not even a measurable factor in the reason that health care costs are going up. And the -- the reason they know that is because they look at Texas, and they look at these other states with caps, and it turns out that their health care costs are going up just as fast.
And there -- there was an article recently, the single place where costs are going up fastest, where per person care is highest in the country is actually in Texas. So what you find out is, is that, more than anything, it has to do with how we're reimbursing doctors, how we're reimbursing hospitals. Are we asking for high-quality care rather than just more care?
The problem is, right now, we've got a system, fee-for-service. You basically pay -- if a doctor is reimbursed for each time he takes out a tonsil, but he's not reimbursed for providing counseling for a child to change their diet, because maybe they've got an allergy, then over time system-wide, even if each individual doctor is doing their best, system-wide, what you see is more and more people getting their tonsils taken out, because there's an economic imperative moving in that direction.
Hospitals -- let me ask you a question. You know, some of you guys, you know, have probably cars that you -- you love. And every once in a while, it breaks down. You take -- if you don't do your own work on it, you take it in to the shop. They fix it. Let's say that, three weeks later, the exact same thing broken. Your transmission is all messed up again.
Now, if you went back to the -- the car shop, you'd expect that they wouldn't charge you to fix what you thought you already paid for. But that's not how it works in medicine. In medicine, a hospital will take you. They are supposed to fix you up. Three weeks later, you end up back in the hospital. They get paid all over again.
And so part of what we can do is to say, we're going to give a bonus to hospitals that lower their readmission rate, that try to get it right the first time. Those turns out -- those things turn out to be the biggest factors in why health care costs are going up faster and faster.
Now, as I said, I'm still a believer in fixing the insurance system just so that we don't discourage doctors from going into certain occupations or certain specialties or in certain regions, but that, it turns out, is not the main driver of costs in the system, OK?
All right, it's a young lady's turn. Here you go. Right here. And then I'll come back around this way. I know this -- this group feels ignored here.
QUESTION: Thank you so much for being here, President Obama. It means so much to all of us.
OBAMA: Thank you.
QUESTION: I have Medicare and a good supplement, and I'm just happy as I can be. I never pay a cent for my medical care. But I think medical care is a human right that everybody in this world deserves. I wish, as I think you do...
OBAMA: I appreciate that.
QUESTION: ... that we had single-payer, like all other developed nations. I'm so glad that you're going to insist upon a government option, and we're trusting that you'll hold tight to that. Thank you so much.
OBAMA: Well, thank you very much. And I do -- I do want to emphasize -- you know, I've been talking a lot about costs lately, because cost is important. If medical care just gets more and more expensive, then no matter, even if we decide to cover everybody under Medicare, for example, sooner or later, we'd run out of money, and then we'd be right back where we started. So we've got to control costs.
But I don't want to lose sight of the personal element of this. I mean, I get -- I get letters every day -- some of you may know, I get -- we get about 40,000 letters, I think, a day. I mean, we get a lot, letters and e-mails.
My correspondence office, they -- they choose 10 for me to read each day. And I'd say at least half of them have to do with health care.
And you read some of these letters, and they're just heartbreaking. You know, you've got parents who've got adult children who, you know, contract cancer, but the children are unemployed or don't have health insurance, and so the parents, who were saving for their retirement, suddenly they've got to drain all their retirement savings to help keep their child alive.
You've got people who -- who had a small business and, at a certain point, just had to give up their business because they couldn't afford the health care premiums as a self-employed person, had to give up their dream.
You know, people who are -- who are bankrupt. There was a woman in Wisconsin who I met who -- she's 36 years old, had a double mastectomy. Now the cancer has traveled to her bones. She's got two kids. Her and her husband have jobs with health insurance, and they're still $50,000 in debt because of the care. And so she's fighting for her life, but she's worrying if, you know, she passes away, that all she's leaving behind to her kids is hundreds of thousands -- dollars worth of medical bills.
That just doesn't make sense. We're the wealthiest country on Earth. And for us to be the only advanced nation where everybody can't count on basic health care is shameful. And -- and we've been talking about it for 45 years, 50 years.
My attitude is, is that, you know, America is the greatest nation on Earth. We can solve this problem. But we've got to put our minds to it, and we've got to overcome all the fear tactics and misinformation that's out there and just go ahead and fix it.
So -- all right, a gentleman's turn right here, this gentleman. Right here.
QUESTION: Thank you, Mr. President, for being here. My name's Jim Skaff (ph). We just finished the 10th annual RAM in Wise County, and I tried every way in the world I could to get you down there because...
OBAMA: The 10th annual...
QUESTION: RAM. That's rural medical.
OBAMA: Oh, the RAM, absolutely.
QUESTION: OK. This year, again, we broke all records, 2,700 people treated.
OBAMA: You guys -- you guys did outstanding work. And people are able to get care because of the great volunteer efforts of people all over the country. That's great.
QUESTION: I felt like if -- if you could have made it RAM and these people that have all of these questions about whether we needed health care or not, it wouldn't take them but a minute to see that we really need it now really bad.
And a follow-up question was, the people that you have Medicare now, why can't some people get on that?
OBAMA: Why can't people just get on Medicare now?
OBAMA: Well, that's the same question that this gentleman asked. And as I said before -- well, there are some people who -- who proposed in the past Medicare for all. That essentially is what's called a single-payer plan. And a lot of countries have single-payer plans.
I have to tell you that politically it would have been difficult and it would have been very disruptive, because what would have happened is a lot of companies who are currently providing care, their attitude would have been, you know what? If I can get government to pay for this instead of me, let me just drop coverage.
So now suddenly a lot of people who currently had coverage would find their coverage dropped. They would have to sign up for Medicare. And pretty soon you've got everybody on Medicare, but we don't have the tax base to pay for everybody being on Medicare.
And -- and so what we're trying to do is to build on the employer-based system that we already have. That has some disadvantages. I won't lie to you. But it's the system that people are accustomed to.
And, you know, if people are nervous even when I tell them you won't have to change your health care and you don't have to be part of a government plan, then imagine how nervous they'd be if I said we're going to open up Medicare to everybody. Then, you know, we would really -- I think people would just worry that they would lose their doctor, they'd lose their plan. But -- but I still think the notion of having a public option that people can sign up for voluntarily is something that needs to be part of overall health care reform.
OK? The young lady right next to me.
And I've just been alerted that unfortunately this is the last question, so you get the last word.
QUESTION: Hi, Mr. President. My name is Autumn Wells (ph), and I'm an independent pharmacist from Big Stone.
My question is, with this new health plan and opening up all this access to physicians, which is wonderful, with that, there will be new prescriptions for patients. And how are they going to have access to the medications that they need to treat those medicines?
And can you tell me, please, that it won't be as bad as this Part D plan has turned out to be for so many of my patients? They have great coverage for three months, and then they have no coverage for the rest of the year because they can't afford the out-of-pocket to meet the catastrophic.
OBAMA: Right. Well, first of all, I'm glad to know that there are still some independent pharmacists out here, because I know that, you know, it used to be the pharmacist was one of the most trusted members of the health care system. Increasingly, you know, it's harder and harder to be an independent pharmacist, because of the big, you know, pharmacies, operations that are out there.
I think that any plan that we have has to have prescription drugs as part of it, because that's a bigger and bigger part of health care today, and the deal that we need to strike with the drug companies is, look, you're now going to have a whole bunch of new consumers. You've got to cut a better deal for those customers so that they're not three months or six months into the year, suddenly having used up their entire benefit, they can't afford out-of-pocket costs, and they just suffer until they can get back and a new year starts.
Now, that -- that is going to be a battle with the drug companies. You know, as I said, to their credit, they've been willing to negotiate, but let's face it: They like making a profit. And the prescription drug plan as currently constituted has been very profitable for them. And they will, you know -- there will be some tough negotiations.
But what I want to do is make sure that I'm negotiating on behalf of your patients, your customers. They need help. And one thing that you raise, as we're increasing access, not only are we going to have to make sure that drugs are affordable, we've also got to make sure that there are enough doctors out there, especially in rural communities.
And that's one of the reasons why what we've said is, let's make sure that the reimbursement system that we have under Medicare and under these other plans reimburses family physicians, primary care physicians, people who are, you know, doing regular checkups, helping prevent illnesses ahead of time, they are the lifeline for health care in a lot of communities, especially rural communities, and we've got to make sure that we are encouraging more and more people to go into that practice.
I also want to provide scholarships to medical students to go into these kinds of practices, as well.
So, everybody, you guys have been terrific. I had a wonderful visit. And I apologize to any customers who were trying to shop while we were doing our town hall meeting.
But -- but I really enjoyed your time. I hope you got the information you need. Please spread the word to your friends and neighbors, because, as I said before, there's just a lot of misinformation out there.
If you have health care, you'll be able to keep it, but we are going to fight and work to make sure that health care inflation goes down, you have better access, better quality, we cover people who currently don't have it, and we make sure that insurance companies are treating you fairly. I think that's a good deal and we can get it done with your support.
Thank you very much, everybody.