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Health Summit 2010

Sen. Chuck Grassley on Medicare at White House health summit

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CQ Transcriptions
Thursday, February 25, 2010; 4:55 PM

MCCONNELL: Mr. President, we'll now turn to Chuck Grassley.

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 bid differential, where it goes -- 75 percent goes to beneficiaries and benefits, and 25 percent to the federal government.

OBAMA: 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.

GRASSLEY: 75 percent -- 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.

GRASSLEY: So I'm not questioning CBO. But in regard to what Mr. Ryan said, I want to back it up with a -- with a quote from 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 H.I. trust fund savings as both" -- with emphasis upon both -- "improvement the government's ability to pay future Medicare benefits and financing new spending outside of Medicare would be essential 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 got to be careful how you treat small business. And small business can be -- 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 -- you can build on those high-risk pools to take care of people that have need, particularly those that are -- would be hit by the mandate and might not be able to afford the insurance without the high cost. The high cost of this bill comes from a unconstitutional mandate, it comes from the fact that for the first time in the 225-year history of the country the federal government's telling you, you got to buy something. That just doesn't make sense to a lot of people at 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's God around here. They say we give them policy, it's going to save X number of dollars, it's going to save X number of dollars.

But do you think that we're going to 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. You're going to put 14 million -- I don't know whether it's 14 million or 18 million people under this bill into Medicaid.

Medicaid pays about, in my state, I think, about 60-some percent. Medicare pays 80 percent of cost. Doctors don't take Medicaid. So you're going to promise 14 million to 18 million 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 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 of that time there, because I learned a heck of a lot about our health care system that I wouldn't have otherwise known.

OBAMA: Thank you, Chuck.

The -- I'm going to go to Kent next. I just want to make one point.

The -- 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, you know, 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 have 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 donut 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 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 (ph).

Kent Conrad?

GRASSLEY: Will you give me 30 seconds, please?

OBAMA: Sure.

GRASSLEY: Yes. I think that we've already had laid out here in four or five different ways how a heck of a lot of money can 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.

OBAMA: But what I'm saying, Chuck...

GRASSLEY: And that's the point I'm making.

OBAMA: 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 -- I want to make sure that Kent gets in here, because Kent knows something about the budget as the chairman of the Budget Committee.


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