Health Summit 2010

President Obama, Sen. Alexander debate costs of health-care reform

CQ Transcriptions
Thursday, February 25, 2010; 11:59 AM

OBAMA: Well, thank you very much, Harry.

Everybody went a little over time, which is not surprising with a room full of elected officials. I wanted to give people a little bit of wide berth starting off, but we're going to need to be more disciplined moving forward if we're going to be able to cover every item, and I'll try to set the example here.

I just want to address very quickly, Lamar, the issue of process that you raised at the beginning, and then we'll move on and start talking about the specifics. As I listened to your description of the House-Senate bill, as well as the proposal that I put on our Web site, obviously there were some disagreements about how you would characterize the legislation.

On the other hand, when I listened to some of the steps that you thought Republicans would be open to, I thought, well, a bunch of these things are things that we'd like to do, and in fact are in the legislative proposals.

So part of the goal here, I think, is to figure out what are the areas that we do agree on; what are the areas where we don't agree; and at the end of that process, then make an honest assessment as to whether we can bridge these differences. I don't know yet whether we can. My hope is that we can, and I'm going to be very eager to hear and explore how we might be able to do so.

So rather than start at the outset talking about legislative process and what's going to happen in the Senate and the House and this and that, what I suggest is let's talk about the substance, how we might help the American people deal with costs, coverage, insurance and these other issues. And we might surprise ourselves and find out that we agree more than we disagree. And that would then help to dictate how we move forward.

It may turn out on the other hand there's just too big of a gulf, and then we'll have to figure out how we proceed from there. So that would be my proposal.

And what I'd like to do, then, is to start first with something I heard everybody agree on, every single speaker, and that was the issue of cost. It is absolutely true that if all we're doing is adding more people to a broken system, then costs will continue to skyrocket, and eventually somebody's going to be bankrupt, whether it's the federal government, state governments, businesses, or individual families. So we have to deal with costs. I haven't heard anybody disagree with that.

Now, I've already indicated some -- some statistics, but I just want to reemphasize these. More than a quarter of small businesses have reported a premium increase of 20 percent or more just last year -- 20 percent. As a consequence, a lot of small businesses dropped coverage altogether. Fewer than half of businesses with fewer than 10 workers now offer coverage.

By one estimate, without health care reform, by the end of the decade premiums for businesses would more than double in most states. And the total cost per employee is expected to rise to more than $28,000. So you can imagine what that does to hiring, what that means for incomes, and you can imagine how many families are going to be unable to afford insurance.

As I mentioned earlier, I hear stories from people all the time about how these costs have very concrete impacts on their lives. I spoke to a family, the Links (ph) from Nashville, Tennessee. They've always tried to do right by their workers, with their family-run company, but they had to do the unthinkable and lay-off employees because their health care costs were too high. I've talked to other business people who say, "We were going to hire, but we decided not to when we got our monthly premiums." And so one of the goals that I set out very early-on in this process was how do we control costs. Now, what we have done, as I mentioned earlier, was to try to take an idea that is not just a Democratic idea, but actually is a Republican idea, which is to set up exchanges. These are pools where people can come in and get the same purchasing power as members of Congress do as part of the Federal employees' health care plan, as people who are lucky enough to work with big businesses can do because there are a lot of employees in those big businesses.

What we've said is that if you join one of these exchanges, you will have choice and you will have competition. You will have a menu of private insurance options that you'll be able to purchase, but because you're not purchasing it on your own, you're purchasing it as part of a big group, you're going to be able to get lower costs.

For folks who even with those lower costs still can't afford coverage, we provide some subsidies. But here's what I want to emphasize is that even without the subsidies, it's estimated by the Congressional Budget Office that the plan we put forward would lower the costs in the individual market for the average person who's just trying to buy health insurance and they don't -- they're not lucky enough to work for a big company, would lower their costs by between 14 percent and 20 percent.

So Lamar, when you mentioned earlier that you said premiums go up, that's just not the case, according to the Congressional Budget Office.

ALEXANDER: Mr. President, if you're going to contradict me, I ought to have a chance to -- to...


ALEXANDER: The Congressional Budget Office report says that premiums will rise in the individual market as a result of the Senate bill.

OBAMA: No, no, no, no. Let me -- and this is an example of where we've got to get our facts straight.

ALEXANDER: That's my point.

OBAMA: Well, exactly, so let me -- let me respond to what you just said, Lamar, because it's not factually accurate. Here's what the Congressional Budget Office says. The costs for families for the same type of coverage that they're currently receiving would go down 14 percent to 20 percent. What the Congressional Budget Office says is that because now they've got a better deal, because policies are cheaper, they may choose to buy better coverage than they have right now, and that might be 10 percent to 13 percent more expensive than the bad insurance that they had previously.

But they didn't say that the actual premiums would be going up. What they said was they'd be going down by 14 percent to 20 percent. And I promise you, I've gone through this carefully with the Congressional Budget Office, and I'll be happy to present this to the press and whoever's listening because this is an important issue.

ALEXANDER: Well, may I...


OBAMA: Let me -- let me just finish, Lamar. Now, the -- what we've done is we've tried to take every single cost-containment idea that's out there. Every proposal that health care economists say will reduce health care costs, we've tried to adopt in the various proposals.

OBAMA: There are some additional ideas that Republicans have presented that we think are interesting and we also tried to include. So let me give you an example. You mentioned the idea of buying across state lines insurance. That's something that I put in my proposal that's actually in the Senate proposal. I think that it shows some promise.

You mentioned that, you know, that Mike Enzi has previously said that he's interested in small businesses being able to pool in the equivalent of some sort of exchange. So that's where there's some overlap.

But I just think it's very important to understand that what we've done is to try to take every single cost-containment idea that's out there and try to adopt it in this bill.

What I'd like to do is to see if we can proceed and, you know, have a very concrete conversation about what are the ideas that you guys have that you don't think are in our bill to contain costs. And what I want to do is to see if maybe we can adopt some of those or refine what we've already done in order to further reduce costs.

(UNKNOWN): Mr. President...


OBAMA: And what I'd like to do also is to make sure that you maybe suggest some of the ideas that are currently in the bill that you think are good, because, Lamar, in your opening introduction what I saw was, you know, sort of the usual critique of why you thought it was bad. But as I said, we've adopted a lot of the ideas that we've heard from your side of the aisle. So I hope maybe you could say, "Well, those are the ones that we think are good ideas, here are the things that we think are bad ideas," as opposed to just painting in broad brush.

Go ahead.

ALEXANDER: Mr. President, let me -- let me show some respect for my colleagues here. They're all here eager to speak, all sure they could do a better job than I could on any of these points.

And what I would like to do is get back directly to you with why I believe, with respect, you're wrong about -- your bill would increase premiums, I believe. You say it wouldn't. So rather than argue with you in public about it, I'd like to put my facts down, give them to you. Maybe other colleagues will say that.

As far as Mike Enzi's proposal, he's ready to talk about it. Others are.

So I appreciated the opportunity that Mitch and John gave me to talk. You've made some interesting points. And why not let other members of Congress have a chance to talk.

OBAMA: I think it's a great idea. I'd like to get this issue settled about whether premiums are reduced before we leave today, because I'm pretty certain I'm not wrong. And, you know, you give us the information and we're going to be here all afternoon. I promise you we'll get this settled we'll before the day's out. All right?

Mitch, who would you like to talk about costs?

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