Remarks at the afternoon session of President Barack Obama’s health care summit meeting with congressional leaders, as released by The White House:

THE PRESIDENT: Okay, all right. There were several people who were still in the queue who didn’t have a chance to speak prior to us breaking. The topic was still insurance reform, although obviously these things interrelate and I suspect that people may have some other issues that they want to raise.

After this, we’re going to go to the issue of deficit, which touches on some of the issues related to Medicare that have been raised already. And I’m going to actually have Joe Biden open that up.

REPRESENTATIVE RANGEL: Mr. President, before we leave health care reform, could I get on the list? I didn’t know —

THE PRESIDENT: Well, no, no, I mean, we will be talking about health reform, Charlie. I guarantee you, you will be called on before — you’ll have a chance to talk about all these issues. All right.

A PARTICIPANT: Mr. President, what time do you expect to end the meeting?

THE PRESIDENT: My hope is that we get out of here — we’re running a little bit late, but for having a lot of elected officials sitting around a table, we’re not too late. (Laughter.) My hope is, is that we can adjourn by 4:15 p.m. Okay — 4:15 p.m. Originally it was scheduled to go to 4:00 p.m. We’re starting a little bit late on this front, you know, so we’ll see if we can get out of here by 4:15 p.m., all right? That will require probably a little more discipline on all our parts, including myself, than was shown in the morning session — although let me just say that I thought the tone of the discussion was helpful and I appreciate everybody’s participation so far.

With that, I’m going to go Mike Enzi. Then I’m going to go to —

A PARTICIPANT: Mr. President, as long as I hear you talking about leaving, Mr. President, please put me on the list.

THE PRESIDENT: Well, I guarantee you, you guys are all going to have a chance to speak. But we’re going to go to Mike Enzi, and then we’re going to go to Tom Harkin. I know that we had — Jay Rockefeller was still on the list. Was there another Republican that wanted to speak just on the insurance reform issues, or — do you want to go to John Barrasso? All right, we’ll let you guys split time on this one.

All right. Mike.

SENATOR ENZI: Thank you, Mr. President, colleagues. When we’re talking about insurance reform we haven’t really talked about — but Representative Slaughter kind of opened the door on it, and that’s Medicare. Seniors out there are really nervous. Seniors are the ones objecting the most to the program, and it’s because they see half a trillion dollars coming out of their program.

If Medicare were separate and any savings that we did in Medicare reform went back into Medicare, it would do a lot to relieve the tension that’s out there. It would even be a way to pay for the doc fix. So I’m hoping that that can be a piece of what we’re doing.

I really appreciate this exchange. It would have been helpful had we had this nine months or a year earlier and had it in even more detail and for more days. What we were presented with in the HELP Committee, of course, was a bill that was already half-drafted. And we started the markup on it and then we got the other half later. And since we have not had any input to the drafting — we’re credited with 150 amendments. Well, 17 of those amendments were Senator Murkowski. where she was inserting Native Americans and tribal in 17 different places. I had 11 of them where we put in a thing that required agencies to cooperate.

So the ideas that we had — when Senator Kennedy and I were working bills, we’d set down some principles and then put some detail in, and then draft the bills together. And I hope that that’s something that we go to on future bills. It works. In a three-year period he and I got 38 bills signed by the President; in the last year I’ve gotten two that I’ve gotten pens from this President. And the way that we’ve done those has been through that kind of a process. And unless we go through that kind of a process I don’t think we’re going to — I don’t think we can get to the bipartisan thing.

And that’s what the purpose of this meeting is, is to kind of get all these ideas together and see how they gel. In insurance reforms, small business health plans — that’s different than the AHPs, which is what they were talking about, and they cover some of the problems that were talked about. One of the problems is mandates. And Olympia Snowe contributed to that part. She had a provision that if 26 of the states adopted a mandate it would be a mandate nationwide. And as other mandates became 26 they’d be included with it, too.

We talked about health savings accounts. I don’t think that meets some of the federal minimum standards that the federal government might put on it, and that’s going to disappoint some of our employees because that is one of the options that federal employees have, is health savings accounts. And it’s particularly good for the younger, healthier people. They can get that; they’ve got catastrophic coverage. If they put the amount of money that they would have spent on a Blue Cross plan or some other plan, the difference between the two, into a savings account, in three years they’ve covered the huge deductible. And they can continue to do that tax-free. So it’s a process that would be really objected to if it’s excluded or changed.

I like the exchanges, and the reason I like the exchanges is it’s kind of a form of bidding. It’s more transparent, so people can see what they’re buying. And that would be a big help. When we were in the shoe business, my wife used to, after 10 years, she decided she would bid out our insurance. We didn’t know there was that much flexibility in insurance — she saved a bunch. And then of course she didn’t — since we were selling shoes, it’s kind of a fixed price, so she didn’t really take the low bid and then go back and somebody else and say, can you make this a little lower. But that insurance company we had been with for 10 years came to us and said, we could have done a better deal. She said, you should have when I was buying the insurance. And we got much better bids the next year. So these exchanges can be good.

But what I would hope you would consider is having the exchanges to list anybody’s insurance that wants to put it on there, and then mark the ones that meet the federal minimum standards so that people can decide really what’s out there in the market — and I think it would pull up some of the ones that are lower down up into the category, and at the same time everybody could see what all is on the market out there and hopefully regardless of states.

Thank you, Mr. President.

THE PRESIDENT: Thank you very much, Mike, and thanks for staying succinct. Thank you very much. And I thought you shared some important ideas there.

Tom Harkin.

SENATOR HARKIN: Mr. President, thank you again for bringing us together today. I think if anything of what I’ve learned here so far is that quite frankly we may be closer together than people really think in actually getting agreement that we can move forward on. I hope that’s the case.

There’s been a lot of figures thrown out here and a lot of process things, but I keep thinking we’ve got to bring it back home to what this is all about. We all have our stories. I got a letter yesterday from a farmer in Iowa — really encapsulates:

“I’m a 57 year old Iowa farmer. I’m writing to voice my concern regarding my family’s rapidly escalating health care cost. On Saturday, February 20th, I received a notice from Wellmark Blue Cross Blue Shield of Iowa informing me that our health insurance premium will be increasing $193.90 per month, to a monthly total of $1,516.20. This is a 14.6 percent increase and will result in a yearly cost of $18,194.40 for a family of four.

“Ten years ago, our monthly health insurance premium was $373.50 per month for a similar policy which had a lower deductible and covered three additional children. Health care costs are out of control and as a self-employed individual I feel powerless.

“At the current rate of increase by the time I meet Medicare age my premiums will cost $42,000 per year. As a farmer, I manage risk on a daily basis — weather, weeds, insects, and fluctuating commodity prices. I have not yet found a way to control my exposure to health care expenses.

“Because of preexisting conditions, I have been denied access to coverage under more economical insurance plans. Therefore I am stuck in an expensive pool and have few options. The best option would be for the U.S. Congress to pass comprehensive health care reform resulting in affordable health care for all. The health of my family and the future of small business depends on it. Sincerely, Raymond Smith, Buffalo Center, Iowa.”

Mr. President, we spent — and I hear talk about, well, we got to start over and do all this thing again. You know, we spent one year considering a range of ideas from experts from all over the political spectrum. Two committees — the HELP committee under the able leadership of Senator Dodd; the Finance Committee under the leadership of Senator Baucus — held over a hundred bipartisan meetings and walkthroughs to discuss this bill. Our bill contains over 147 distinct Republican amendments.

Now, on the issue of health insurance reform of the 10 key elements in the House bill, we have nine of them in our bill — nine out of 10, that’s not bad. The only one that’s missing is the health savings accounts. But nine out of 10 are in our bill that are in the House Republicans bill.

Now, again — what are they? Again, preexisting conditions, we’ve covered that; no rescissions when you get sick; no lifetime annual caps; no gender-based ratings; keeping you kids on until they’re age 26 — that’s in the House Republican bill, that’s in our bill. So I think we’re very close on this.

The last thing I just want to address myself to is this idea that somehow we can do a little bit, we can take an incremental type of an approach. Somehow we can do insurance reforms, but we don’t have to do anything else. Well, quite frankly, if we want insurance reforms you can only do that if everybody is in the pool. You can only get everybody in the pool if you make it affordable for middle class families and others. You can only make it affordable for middle class families and others if you have cost controls.

What I’m saying, Mr. President, and others, is this all hangs together. You can’t pick one out and do it without doing it all together. It all hangs together. Cases in point: some states in the ’90s tried to do health insurance reform without doing anything else. And they found it to be a debacle because the insurance premiums skyrocketed. New Hampshire, Kentucky, and Washington were forced to repeal their reforms because of that.

Case in point: Massachusetts in the ’90s put in health insurance reforms (inaudible) — individual market premiums doubled. Four years ago when they did their comprehensive reform and they put the package together, premiums dropped by 40 percent in Massachusetts. That’s why you can’t do this incremental approach.

Every time I hear about — we’re sinking, we’re drowning in this country on health care — an incremental approach is like a swimmer who’s 50 feet offshore drowning and you throw him a 10 foot rope. And you say, well, it didn’t reach him but we’ll get it back and we’ll throw him a 20 foot rope next time. Then we’ll throw him a 30 foot and a 40 — by that time, the swimmer has drowned. And that’s what’s going to happen to Ray Smith and so many other families in this country — they’re going to drown by the time — if we do this kind of incremental type of an approach that I hear others talking about.

Lastly, I’d like to put this in a different kind of a contextual framework. We don’t allow segregation in our country on the basis of race, creed, color, national origin, et cetera. Twenty years ago this year we also said we’re not going to allow segregation on the basis of disability when we passed the Americans with Disabilities Act. And yet, we still also segregation in America today on the basis of your health. Why should we? Why should we allow that to happen? It’s time to stop segregating people on the basis of their health. That’s why insurance reform is so vital, because the health insurance industry in this country is based on a flaw. And the flaw is their ratings are based on segregating people because of their health.

Think about that. Whenever I hear the word “pool” — this pool, that pool, this pool — I think segregation. You’re segregating people out because of their health status. I think it’s time to end that. I sold insurance. I was an insurance agent when I was a young man. And there’s one principle of insurance I learned then that I’ve never forgot — the more people in the pool, the cheaper it is for everybody. You start setting up these pools, you’re going to make it more expensive and you’re going to be segregating people on the basis of health. Let’s think about that. It’s time to stop that kind of segregation in our country.

THE PRESIDENT: All right, Tom. Dave Camp.

REPRESENTATIVE CAMP: Thank you very much. On the issue of insurance reform and preexisting conditions, there are responsible ways to solve this problem and reduce the cost of health insurance for everyone. And we support state universal access programs that address high-risk pools and reinsurance that makes affordable coverage available to those who are sick and those who have a preexisting condition. And I won’t go all of those — through all of those things that Dr. Boustany and others here have talked about.

But — and our approaches are somewhat similar on this issue pre-2014, in the period where the House and Senate bills are wrapping up — ramping up. But they are — there is a pretty big distinction. And that is that there’s a key difference in the approaches. We prevent waiting lists during that period. And we have these programs managed by the state level. And they’re robust enough that CBO has scored that they’ll be effective. And what — what the House and Senate approaches are — is that those rules are set in Washington. And the House and Senate bills are similar in that if you look at the Senate bill on page 48, 51, and 52, it’s the unelected Secretary of Health and Human Services who has the authority to establish waiting periods for access to these programs; raise premiums; reduce benefits. And so, it is a very — while we are similar in what we talk about. There is a very key different approach there.

And then, after 2014, when the bill fully comes into play, you have a very different approach there. And what you do is establish a preexisting condition and link it with the individual mandate. And the American people have told us they don’t want to be forced to buy health insurance that they don’t want and they can’t afford. And this is a significant issue across the country. And the American people are telling us that — that the individual — the mandates, the requirements to buy insurance are something that they want us to scrap and start over on. And that’s why you’re seeing state legislatures around the country passing resolutions saying our citizens are going to have a choice on whether they buy health care. They’re going to have a choice on the kind of coverage they want to have.

And so, this is a fundamental difference in this area of insurance reform that I think we — we have to really begin again and really take into what the American people are saying and expressing this through their elected representatives in the state legislators. I know there’s a lot of former state legislators here; I am one as well, and I think that’s a very serious point that we need to address.

THE PRESIDENT: I’ll just touch on your last point, which is the whole issue of preexisting conditions. Tom Harkin mentioned it. And I’ll be very brief, because I know that we’ve got to move on to the next topic.

The way I understand Leader Boehner’s bill works, and I think that’s the one you’re referring to, the way you deal with a preexisting condition is to essentially set up a high-risk pool. I mean, that’s the mechanism. So what you’re saying is, if you’re sick or older or you got hip replacements or what have you, and you’re having trouble buying insurance on the open market, you’re going to be able to buy into a high-risk pool.

Now, Tom made the point earlier that — and this is indisputable; I don’t think anybody would disagree with this — that if you set up a high-risk pool in which you don’t have healthy people, younger people in the same pool as older, sicker people the premiums for the older, sicker people who have been segregated into this pool is just going to be higher. Now, I have — you know, we looked at the Boehner bill to see sort of how you approach that. And you’ve got some reinsurance — keep in mind, we use a high-risk pool as well until we get to the exchange. And we have reinsurance. For example, for people who are on retiree plans, we want to help employers maintain those plans. And they’ve got an older population. So we want to help reinsure them.

But given the amount of money that you have allocated for that pool, it’s just not going to be a very useful tool for the vast majority of people who’ve got preexisting conditions; just because there’s just not enough money that you guys put into it to be able to cover all the people with preexisting conditions, which is why other states have high-risk pools, as Kathleen mentioned. There are — I don’t know how many states, but let’s say 20, 21 states currently have high-risk pools. Out of all those 21 states, about 200,000 people use the high-risk pool. And the reason is because by just dealing with older, less healthy individuals separately or people with preexisting conditions, it is very, very expensive.

Tom’s point was, if everybody is in it — because presumably none of us know at any given moment who is going to end up being healthy and who is not; we don’t know whether our kids are going to be suffering some sort of disease that we don’t anticipate yet or our spouses get ill — that if everybody is in it, then that drives prices down cheaper for everybody.

So it’s not that I think that the high-risk pool idea is a bad one. As I said, the House, the Senate bill, the bill — the proposal that I put forward all use the high-risk pool as a stopgap measure to get to a broader pool. But the goal has to be to get everybody in, in a place where those risks are spread more broadly.

REPRESENTATIVE CAMP: And if I just might say, we support high-risk pools and reinsurance with $25 billion in funding. The House and Senate versions are $5 billion in funding. And because of that robust support, CBO says this will work.

The fundamental difference after that is that the Health and Human Services Secretary — in that four-year period when they’re somewhat similar — has the authority to raise the premiums, all that — all of that is brought to Washington. We leave that authority in the states, so that they can manage their state pools. And then after the bill becomes effective in 2014, the real problem becomes this — the mandate and the cost — the forcing of the purchase of insurance, which many Americans find objectionable. And that — you can avoid that mandate if you continue to design this as we do in the beginning. And both plans are somewhat similar on that, but it’s a very different structure.

THE PRESIDENT: What I’d like to do is to move on to the topic, which I think underlies — oh, I’m sorry. We’ve still got Jay, my apologies. Jay, please go ahead.

SENATOR ROCKEFELLER: Thanks, Mr. President. One of the — we really haven’t discussed I think what is at the basis of the frustration about this whole business of preexisting conditions and lifetime limits, all the rest of it, and that is, the way and the nature of the health insurance industry for the most part. They are, among all industries I’ve ever encountered — and in the Commerce Committee we have spent a year analyzing and bringing out some of their sins and ills — they’re terrible. They’re in it for the money.

A nice lady who runs Wellpoint said, we will not sacrifice profitability for membership — money first, people second. They — we had a fellow named Wendell Potter (phonetic) who worked for CIGNA for 20 years as a high executive. He came before us on his own, volunteered, and described the way health insurance companies operate. They are looking for reasons to kick you out. They are looking for reasons, if you already have the health insurance, for doing the rescissions. Yes, we’re going to ban those, but not unless we pass a bill.

And, in fact, often employees are incentivized financially to find reasons to kick people off of the insurance which they’re paying for. So you can be paying your premiums and then they discover — they come up with something they found in your background they don’t like and they just kick you off. They can do that now legally. And so people say, well, maybe the states ought to do this, they can do it better. Well, that’s the situation we have now, but 44 of the 50 states make it perfectly legal for health insurance companies to do this preexisting condition, to simply deny coverage for something which people just got sick, as babies or as adults or whatever.

I got a letter from — the CEO of CIGNA had written to me and he said, I want to apologize because we had said that we spent $5 billion in this small group insurance market. Well, I checked a little bit more; in fact, we hadn’t. Now, why don’t people know that? Because the health insurance industry is the shark that swims just below the water and you don’t see that shark until you feel the teeth of that shark. Now, less I be accused of trying to over-dramatize my statement, this is the way they operate. Nobody has particularly oversight of them; they’re not under any antitrust type rules. They can do what they want.

They so dominate the market, as the Secretary pointed out, that there really isn’t any real competition. They can do what they want, and they do. And it’s money. It’s money. And it makes me sick. It shouldn’t happen in America. People say, well, government run, you’re going to do this or put that restriction on them. If you don’t put the restriction on them, they’re going to go on doing this. And so the public option was — I like that a lot, but that’s not going to probably be possible. So you have to go at them, to clip their wings in every way that you can.

And that’s why — and with this general agreement on preexisting conditions and rescissions and lifetime annual limits — you know, it’s not a lot of fun to see an eight-year-old kid — which I have done and I knew this kid, Samuel Borge (phonetic), and he had leukemia, and he had life — annual limits. And he ran out and then he died because there was no insurance. Could they have cured his cancer? I don’t know. But that’s what insurance is for.

So this is a rapacious industry that does what it wants, unknown in their behavior to the people of America — except on an individual basis, and individuals can’t shake up us the way they are now doing it, I think.

So when you talk about the individual mandate, that’s not in there for some government makes that decision purpose. It’s there because you’ve got to have a big pool. Everybody has made that point. I got a son who’s old enough to have health insurance; he doesn’t have it. And when my wife and I found out about it we told him to get it the next day. He didn’t think he needed to have it, he would live forever. Well, that’s — of course, that’s the premise among young people. That’s why we have the requirement, people sign up for health insurance. And they don’t know if they’re going to need it, and he doesn’t know that he’s going to need it, so you make everybody participate and then you have a bigger risk pool, you can do a better job.

I’m going to say one word about medical loss ratio, because it’s sort of a crazy name but it’s a really good concept. What we say is that — the health insurance industry says that they spend 87 percent of all their revenues from premiums or any investment they might have on health care. That doesn’t work out quite that way. For large businesses, they do a much better job; but for small businesses and the individual market, they’re down, in West Virginia, in the high 60s and the low 70s.

So how do you stop that? You can’t stop that by asking them to. You stop that by having a law, which is a good law, saying that you have to spend between 80 and 85 percent of everything you take in, in revenue on medical care for your patients. And if you don’t we will know about it because we’ll be tracking it. And then you have to rebate that difference to the people.

So there’s a reason for doing that. It’s good public policy. It can’t just happen on a voluntary basis. I mean, it’s — but it’s a way to make sure you get your objective.

Let me just close on one other issue. The rate review — and I wish we could talk about the Medicare board — advisory Medicare board, which is controversial, but which is —

THE PRESIDENT: Well, we will have a chance to talk about it next. So, Jay, let’s wrap it up, because I want to make sure everybody —

SENATOR ROCKEFELLER: I’m going to wrap it up. The insurance rate review is important. And if Kathleen Sebelius is to be called an unelected person and she’s head of the group that does all of Medicaid and Medicare and Health and Human Services, and she’s been an insurance commissioner, she’s been a governor, she knows the whole thing — I don’t call her down because she’s not elected, but was appointed by you. And it was a brilliant choice.

People say decisions can’t all come from Washington. Sometimes decisions have to come from Washington because what we’re about here is not trying to run by government; we’re trying to protect consumers. And if you’re going to protect consumers, you’ve got to have a way that they really do get protection and that they know it and that they feel it in their lives.

So this is — this insurance reform is important; a profoundly emotional subject out there and we’ve got to do something about it.

REPRESENTATIVE BOEHNER: Mr. President, Ms. Blackburn was on the list I thought before we left.

THE PRESIDENT: Okay. Go ahead, Marsha.

REPRESENTATIVE BLACKBURN: Thank you, Mr. President. And, yes, one of the points that we did want to cover today was the across-state-line purchasing of insurance. You’ve alluded to that a couple of times and mentioned that you felt like we were close on that issue. I think that there are some very important structural differences in the way we approach this, just as I think that there are very deep philosophical differences in how we approach health care reform.

Now, a lot of the people that I talk to want us to start over in this issue and they want us to give them the ability to hold insurance companies accountable. One of those ways is through very robust competition. And when you have a district like mine in Tennessee, where the bulk of our constituents are within 15 miles of the state line, the ability for those individuals — who have families and live and work and have employees on the other side of the state line who shop for major purchases every day — is to allow them to be able to make those purchases.

Also, when you talk about holding insurance companies accountable, if you want to empower patients in front of those insurance companies, take the power away from them, then give them the ability to buy a policy that suits their needs. They are really tired of paying for coverage they don’t want. If you want to prevent premium acceleration, such as the issue in California right now, where the premiums have gone up 39 percent, if you are siding with protecting those insurance companies and not allowing across-state-line competition, then what you’re doing is denying Californians the ability to go to Oregon, where they could buy a policy for 25 percent less, or individuals in New Jersey who could go to Pennsylvania and buy a policy and lower their cost 26 percent, or go to Wisconsin and buy one and lower their cost 74 percent.

Now, some of the very differences in our bill — we have a way to do this without putting a federal bureaucracy in charge of it. States can already do compacts, but the Senate bill legislation would require state action and then federal approval for those compacts to take place.

There’s another important point here. The bill that you all are proposing would not put these in place until 2016, and quite frankly I think a lot of the American people agree with us that care delayed and access delayed is care and access denied. And they would like to see those — basically what you have — state lines right now basically have stop signs up when it comes to across state line access. They would like to see that come down, and like to see those access portals opened up so that they can first lower their cost, secondly so that they have greater ability to hold insurance companies accountable. And then also state legislators, even some of our governors — many of the governors — favor approaching this model and allowing our constituents a way to access this, get the cost down. And I will be brief so that we can move on to other topics. Thank you.

THE PRESIDENT: I appreciate that very much, Marsha. Just to close, because there have been two issues that were raised — one, the purchasing insurance across state lines; and the other was the issue of the mandate, and I just want to address those very briefly, and then I’m going to turn it over to Joe.

I support the idea of purchasing insurance across state lines. And you’re right that the way we structure it is to have compacts between states so that you start getting a regional market. But I think there are two things that are important to understand.

Number one, with respect to California, for example, the problem, as was presented yesterday, in California, was not that there were a whole bunch of insurance companies from other states who were clamoring in to get into California to sell insurance to those individuals who saw their premiums spike by 39 percent. There weren’t.

The problem has to do with the fact, according to them, that people who have lost their jobs now who are healthy and can’t afford the individual market have basically just decided, I’m going to go without insurance; I’ll see — I got to take my chances, because I just can’t afford it. What that’s left is people who, because of preexisting conditions, because of special health care needs, because of age, they have to keep their insurance. And so the pool has become older and sicker.

Now, the way to get at that problem is actually what we’ve discussed earlier, which is to broaden the pool; make sure everybody is in the pool. And that’s what the exchanges do.

I actually think that on the purchasing insurance across state lines, there may be a way of resolving the philosophical difference — not entirely, but there’s a potential way of bridging this gap, and that is to say that once there was a national exchange with some minimum standards, then potentially you could just have a national marketplace, and anybody could be able to sell into the exchange. This is something that Mike Enzi just mentioned. I actually think that could be workable once the exchange was stood up. So there may be a way of bridging this difference.

Now, on the mandate, though — because the mandate issue is connected, and so I’m just going to mention this real quickly, and then I will move on. When I ran in the Democratic primary I was opposed to the mandate.

A PARTICIPANT: Bless you.

THE PRESIDENT: Well — and I’ll — because my theory was, you know what, the reason they don’t have health insurance isn’t because somebody is not telling them to get it, but because they just can’t afford it, and that if we lowered costs enough then everybody would be able to get it. So I was dragged, kicking and screaming to the conclusion that I arrived at, which is, is that it makes sense for us to have everybody purchase insurance. And I have to say this is not a Democratic idea. I mean, there are a number of Republicans sitting around this table who have previously supported the idea of an individual mandate, responsibility.

The reason I came to this conclusion is twofold. One is cost-shifting, which is a fancy term for saying everybody here who has health insurance is one way or another paying for those who don’t. Every time somebody goes into the emergency room — if Jay’s son got hit by a bus and his dad wasn’t Jay Rockefeller, and he ends up in the emergency room, we’d give him emergency treatment, and we’d all pick up the tab. And the calculation — not our calculation, but independent economists — is that each family with health insurance right now is picking up $1,000 to $1,100 worth of costs for people who don’t have health insurance.

So when Tom Coburn earlier said, you know, if a kid comes to the emergency room, they’re going to get treated — yes, they will get treated. Who’s paying for it? Well, we’re paying for it. Every American family who’s got health insurance is paying for it. Every employer who is covering their employees is paying for it.

So we’re already putting the money in. It’s just in a very inefficient way. And so the notion that somehow if we don’t ask people to carry their responsibilities, that we’re saving money — no, we’re not saving money; it’s just we don’t see it. It’s called uncompensated care, and we all get charged an extra thousand bucks. So that’s part of the reason.

The second reason has to do with the issue of preexisting conditions and the pool that we’ve already discussed, but I just wanted to address those two issues. Marsha, you had one thing that you wanted to respond to.

REPRESENTATIVE BLACKBURN: Yes, Mr. President, I did, very quickly. I would just suggest that we’re looking at this from, in your example, we’re looking at it the wrong way. You’re talking about letting companies into California. I’m talking about letting individuals out.

THE PRESIDENT: No, but it’s the same idea, Marsha. It doesn’t matter whether they’re — companies are going in or people are going out. I promise you if —

REPRESENTATIVE BLACKBURN: Free it up. Free it up.

THE PRESIDENT: I promise you that the problem that’s going on in California is going on in every state. It’s not unique to California. It’s not as if there are insurance companies that are given great deals in Iowa. That gentleman farmer who just talked about — these are some structural problems that exist in every state.

It is — what is true — no, I want to say this, hold on a second, guys — what is absolutely true is that some states probably have higher mandates than others and so you can probably attribute a certain amount of the cost in a high — a state that has more requirements for bare minimum coverage, doesn’t allow drive-by deliveries or requires mammograms or what have you. Those things all may add some incremental cost, but the truth of the matter is, is that that’s not the reason that you’re seeing such problems. In a lot of states, the problem is just you don’t have competition at all. We want competition. We just want some minimum standards.

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 around 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 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 budget, 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. It’s 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.

Now, 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’s 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 it —

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 think you do.

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 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 reality of their scoring.

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-some 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 and grandchildren. 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?

THE PRESIDENT: All right, what I’d like to do is this — it is now a quarter to four. I said we’d try to get out of here at 4:15 p.m. We have not spoken about coverage and we’re going to need to wrap this up. I know that some people may be on a tight schedule. I’m going to ask that people are willing to stay until 4:30 p.m., which gives us 45 minutes.

And what I’d like to do is to round out this conversation by focusing on what I think is probably at the core one of the bigger philosophical disagreements between the parties in how we address health care moving forward.

I think we’ve identified one already, which is the issue of insurance and minimum standards. And that was a debate surrounding the exchange, that was a debate that we discussed when it came to being able to buy insurance across interstate lines.

I think the second issue, which Eric Cantor alluded to earlier, John Boehner just alluded to, is the issue of coverage, and that is: Can America, the wealthiest nation on Earth, do what every other advanced nation does, which is make sure that every person here can get adequate health care coverage, whether they’re young or old, whether they are rich or poor? And I think that the effort in the House and the Senate has been to control costs to reform the insurance industry to deal with some of the structural deficit issues surrounding entitlements, and to do that all in a context in which everybody is getting a fair shake.

And right now frankly there are 30 million people who don’t have health insurance at all. There are a whole bunch of people who aren’t added to that list who all they have is a catastrophic plan, and again, they never go visit a doctor unless they’re really sick.

The way we tried to do it was not a government-run health care plan, Paul. I mean, that was some good poll-tested language that has been used quite a bit, but the fact of the matter is, is that, as Dick just alluded to, the way we’ve structured it through the exchange would be to allow people to pool, allow everybody to join a big group, and for people who can’t afford it, to give them subsidies, including small businesses. And so the question is whether there is a way for us to arrive at an agreement that would reach those people.

John Boehner, I looked at your bill. I think, as I said, there is some overlap on some issues. But when it comes to the coverage issue, the Congressional Budget Office says yours would potentially increase coverage for 3 million people, and the efforts of the House and the Senate would cover 30 million. That’s a 27-million-person difference.

We can have an honest disagreement as to whether we should try to give some help to those 27 million people who don’t have coverage. And so that’s I think the last aspect of this, and this is probably going to be the most contentious because there is no doubt that providing those tax credits to families and small businesses costs money. And we do raise revenues in order to pay for that. And it may be that the other side just feels as if, you know what, it’s just not worth us doing that.

But one of the things I hope we don’t do is to pretend that somehow for free we’re going to be able to get those 30 million people covered. We’re not. If we think it’s important as a society to not leave people out, then we’re going to have to figure out how to pay for it. If we don’t, then we should acknowledge that we’re not going to do that. But what we shouldn’t do is pretend that we’re going to do it and that there is some magic wand to do it without paying for it.

So with that what I’m going to do is I will go to whoever you want first, Mitch.

SENATOR McCONNELL: Mr. President, Dr. John Barrasso is going to make our opening statement on coverage.

THE PRESIDENT: And then I will call Henry Waxman, and we’ll just go back and forth.

SENATOR BARRASSO: Thank you very much —

THE PRESIDENT: And because we are short on time, let’s keep our remarks relatively brief.

SENATOR BARRASSO: Thank you very much, Mr. President. For people who don’t know me, I practiced medicine in Casper, Wyoming for 25 years as an orthopedic surgeon, taking care of families in Wyoming. I’ve been the chief of staff at the largest hospital in our state. My wife is a breast cancer survivor. Bobbi has been through three operations, a couple of bouts of chemotherapy. We’ve seen this from all the different sides of care.

And this discussion needs to be about all Americans because everyone is affected, not just people that don’t have insurance. And I’ve had dozens and dozens of visits to senior centers and town hall meetings, and visited at service clubs, and if you go to any community in America and you ask the question, “Do you believe that this bill up here — that this bill, if it becomes law, do you believe you will pay more for your health care, you personally?” Every hand goes up. And then you say, “Do you believe if this bill becomes law, overall health care in this spending — its spending in the country will go up?” Every hand goes up. And then you ask the most personal question of all, “Do you believe if this bill becomes law, the quality of your personal care will get worse?” Every hand goes up.

And most worried of all are the seniors, when you go to the senior centers, because they know there’s going to be $500 billion taken away from those who depend upon Medicare for their health care, and it’s not just Medicare Advantage. It’s hospitals; it’s the doctors; it’s the nursing homes; it’s home health, which is a lifeline for people that are home alone; it’s hospice, for people in their final days of life. That’s all going to be cut. That’s why the seniors are most concerned.

And even the White House own actuary if this goes into play, one in five hospitals, one in five nursing homes will be operating at a loss in 10 years. That’s what we’re looking at.

Now, for 25 years practicing medicine I never asked anybody if they were a Republican or a Democrat or an independent; didn’t ask if they had insurance or not; took care of everybody. And many, many doctors — I know Dr. Coburn, Dr. Boustany — do that, we take care of everyone, regardless of ability to pay. Doctors work long hours; nurses work long hours.

And, Mr. President, when you say with catastrophic plans, they don’t go for care until later, I say sometimes the people with catastrophic plans are the people that are best consumers of health care in using the way they use their health care dollars, because a lot of people come in and say, my knee hurts, maybe I should get an MRI, they say, and then they say, will my insurance cover it? That’s the first question. And if I say yes, then they say, okay, let’s do it. If I say, no, then they say, well, what will it going to cost? And what’s it cost ought to be the first question. And that’s why sometimes people with catastrophic problem — catastrophic health plans ask the best questions, shop around, are the best consumers of health care.

But to put 15 million more people on Medicaid, a program where many doctors in the country do not see them, as Senator Grassley said — you know, you say, how are you going to help those folks? And, Mr. President, when I talk to doctors, they say, I have a way: Put all the doctors who take care of Medicaid patients under the Federal Torts Claim Act. That will help them, because they’re not getting paid enough to see the patients. But if Medicare — if they accept those patients and then their liability insurance is covered under the Federal Tort Claims Act, I think you’d have a lot more participation in that program.

I do believe we have the best health care system in the world. That’s why the premier of one of the Canadian provinces came here just last week to have his heart operated on. He said, “It’s my heart, it’s my life. I want to go where it’s the best.” And he came to the United States. It’s where a member of parliament — a Canadian member of parliament with cancer came to the United States for her care. They all have coverage there, but what they want is care — so coverage does not equal care.

What we heard from Senator Conrad is also right. Half of all the money we spend in this country on health care is on just 5 percent of the people. Those are people, for the most part, that eat too much, exercise too little, and smoke. And as a result, we need to focus on those people. So the focus ought to be on the best possible care. People are happy with the quality of care they get, the availability, but they sure don’t like the affordability because it’s not affordable.

And, you know, Mr. President, the first week in medical school we got our stethoscopes and the professor of cardiology, who just died this past year, he said, this is to listen. This is to listen to your patients — listen to their heart, listen to their lungs, but it’s a constant reminder to listen to them, listen to what they are telling you. And it means to listen to the other people in the room. If you’re seeing a child, listen to what the mother is saying. If you’re with an elderly person, listen to what their adult child is saying. And it’s a constant reminder to listen.

And I have great concerns that people around this table are not listening to the American people and are fearful of the consequences of this large bill, which is why only one in three people in America support what is being proposed here. And that’s why so many people, Mr. President, are saying it’s time to start over.

THE PRESIDENT: Let me just — there’s one thing I’ve got to — there are a number of issues, as usual, that I’ve got significant difference with. I’m just am curious. Would you be satisfied if every member of Congress just had catastrophic care? Do you think we’d be better health care purchasers? I mean, is that a change that we should make?

SENATOR BARRASSO: Yes, I think actually we would. We’d really focus on it. You’d have more, as you say, skin in the game — and especially if they had a savings account, a health savings account. They could put their money into that —

THE PRESIDENT: Would you feel the same way if —

SENATOR BARRASSO: — and they’d be spending the money out of that.

THE PRESIDENT: Would you feel the same way if you were making $40,000, or you had — that was your income? Because that’s the reality for a lot of folks. I mean, it is very important for us — when you say, to listen — to listen to that farmer that Tom mentioned in Iowa; to listen to the folks that we get letters from — because the truth of the matter, John, is they’re not premiers of anyplace, they’re not sultans from wherever. They don’t fly into Mayo and suddenly decide they’re going to spend a couple million dollars on the absolute, best health care. They’re folks who are left out.

And this notion somehow that for them the system was working and that if they just ate a little better and were better health care consumers they could manage is just not the case. The vast majority of these 27 million people or 30 million people that we’re talking about, they work every day. Some of them work two jobs. But if they’re working for a small business, they can’t get health care. If they are self-employed, they can’t get health care.

And you know what, it is a scary proposition for them. And so we can debate whether or not we can afford to help them, but we shouldn’t pretend somehow that they don’t need help. I get too many letters saying they need help.

And so, I want to go to —

SENATOR BARRASSO: Mr. President, having a high-deductible plan and a health savings account is an option for members of Congress and federal employees —

THE PRESIDENT: If — that’s right, because members of Congress get paid $176,000 a year.

SENATOR BARRASSO: — 16,000 employees did take advantage of that.

THE PRESIDENT: Because they —

SENATOR BARRASSO: And so, it’s the same plan —

THE PRESIDENT: — because members of Congress —

SENATOR BARRASSO: — that the Park Rangers get in the Yellowstone National Park.

THE PRESIDENT: John — John, members of Congress are in the top income brackets of the country. And health savings accounts I think can be a useful tool, but every study has shown that the people who use them are folks who’ve got a lot of disposable income. And the people that we’re talking about don’t.

Let’s go to Henry. Henry Waxman.

REPRESENTATIVE WAXMAN: Mr. President, I just wonder if some of our Republican friends would like to have seniors on Medicare have catastrophic coverage only. I’d say to the seniors in this country, and we’ve heard mention of them being the people who are worried about this Medicare — this health care bill — they ought to worry if we don’t do something. Because not only will we hear ideas of putting them on catastrophic coverage only, because that will save a lot of money — Paul Ryan has a proposal right now to say that Medicare recipients in the future ought to have just a little voucher, and then they can shop for their own insurance. They could be prudent shoppers.

Well, yesterday I had a hearing with some people who were supposed to be prudent shoppers. They were people from California who were told by Anthem Wellpoint that their insurance was going to go up 30 percent — 39 percent. And could you imagine, seniors, if you have to go shopping with your voucher and then you’re told, oh, by the way, this private policy that you’re going to have to buy just went up 39 percent? And the way to save the federal government money is to shift it on to the seniors. That’s where we’re going if we don’t do anything.

Now, what do we do that makes sense? We’ve got to hold down health care costs. You can’t — we had some ideas that we seem to agree about to hold down health care costs. One idea I did find peculiar, and that’s to have the medical malpractice issue at the federal level. And the Republican proposal is to adopt the California law. Well, the California law is in effect. It’s been in effect since the 1970s. And Californians are faced with a 39 percent increase, so it isn’t holding down their health care costs. We’ve got to really look at holding down health care costs. That’s hard to do, unless we have insurance reform so we could get more people buying health care.

I thought Tom Harkin just summed it up so well. All these issues go together. If you don’t bring more people in to be covered, segment the groups that are covered in high-risk pools, they pay more money — everybody else is going to get a break. Well, under the Republican proposal, the people who get a break for insurance are the people who are healthy. The people who have to pay more are the people who are sick. Is that what we want in this country?

Now, I hear people all day say, Mr. President, the public doesn’t want your plan. Well, if I heard the kind of rhetoric over and over again that I’ve heard from some of the Republicans, I wouldn’t want your plan either. A federal takeover of health care? That’s not what’s being proposed. Somebody said that people ought to be able to buy a policy that suits their needs. Well, how many people are going to come forward and say, I don’t want certain things covered — and then find out that they’re sick and they need that coverage.

We need to have a market like the federal government employees, like members of Congress. We know what we can choose. If somebody wants to choose a health savings account, that means because they want to put some of their money away because it’s tax-free and it’s a really great deal if you got a lot of money. But most people want to know they’re going to have necessary medical coverage for the doctors and the hospitals when they need it. And you have something that’s basic to everybody. Well, they ought to have that for people who are buying private insurance as well.

We had three witnesses yesterday. A woman told us that in her family she had a child with a hole in the heart. And that — because — that became a preexisting condition. So she has health insurance coverage through this individual market. But she says, “I barely use it, because I’m just — I’m afraid to use my health insurance.” She is now told she is going to have this 39 percent increase. She said her health insurance is going to cost her about as much as her mortgage payment each month. She is afraid to drop it, because she doesn’t know where she could ever get health coverage again.

Another woman had asthma, and that was considered a preexisting condition. She was going to face a 39 percent increase, as well. Now, if they were pooled with everybody else in that small business and individual market, which is what our bill does, then there are more people buying insurance and there’s more — there’s more leverage. It’s spreading the cost, not making people have to pay more of these costs.

The people who we’re talking about are people in small businesses where the small business can’t get insurance because, well, they got one employee with a real serious medical problem. So nobody in that group is going to get coverage, the employer can’t afford it. Or women, it costs more for small businesses if they’re in that workforce, especially if they’re older. They don’t want to get coverage. They don’t want to give them coverage either.

We have single adults, a lot of them not very healthy, dealing with chronic conditions, parents and families living on low incomes. They need help from Medicaid. We have to hold down the cost by bringing everybody into the system. Now, in Medicare, what does our bill do? It protects the solvency of the program for an additional seven to nine years. For Medicare, we close the doughnut hole, which means that when seniors have to pay for those prescription drugs, they don’t have to do it all on their own.

We keep them with a Medicare policy, and we provide preventative services and they don’t have to pay for them because we know preventive services will keep us from having to pay for more costly care.

This bill is good for people on Medicare and if we don’t get this passed they’re going to get squeezed like crazy. This bill is good for the American working people. This bill is good for our health care system. And for us to take the Republican proposal — we cover instead of 30 million people, 3 million; we wouldn’t hold down the deficit a bit; we would still have all those preexisting conditions that would keep people from getting their insurance coverage. Maybe if people go and pretend to be patients we could stop some of those false claims, but I’m sure those false claims happen in the private insurance market and not just the public insurance market.

But not only are we covering more people, we’re doing innovative ways to deliver the care that will make it less costly. And as we develop innovative ways to deliver care, especially with chronic care, that will hold down the costs of care and those ideas would be picked up by the private sector. They always follow what Medicare does and then they adopt it because they want to hold down costs.

So you can’t solve any problem — insurance reform, holding down costs, protecting Medicare, dealing with the deficit — unless you deal with it all. And Mr. President, you’re not going to be able to do this piecemeal and I have doubts about whether the Republicans are going to help you because I haven’t heard a lot of willingness to come and work with you now or did I hear it a year ago — I hope I’m wrong.

THE PRESIDENT: Well, I’m going to be equal opportunity here and say we’re not making campaign speeches right now. And I think your points I agree with, but I still think that there’s a lot of areas of agreement that we’ve discussed so far. This is an area, though, that — in which we do have some philosophical disagreements. And so what I — I think it’s — I want to go to a Republican.

The question I would ask to my colleagues, my friends on the Republican side, would be, are there areas of coverage for people who don’t have health care that you would embrace and agree with beyond what has been presented in Republican Leader Boehner’s bill. There may not be. I mean, that may be sort of the threshold at which all of you think we can afford to provide help to people who don’t have coverage, but there may be some other ideas that haven’t already been presented or aren’t embodied in your legislation, John, that I’d be happy to hear about.

REPRESENTATIVE BOEHNER: I want to yield to Peter Roskam from Illinois.

REPRESENTATIVE ROSKAM: Thank you. Mr. President, thanks for your hospitality. For the benefit of the group I want to take you for a couple of minutes to an experience that I had with then-State Senator Obama in the state of Illinois when he took on a very controversial initiative regarding the death penalty situation. And lest you think that the death penalty is sort of a junior varsity issue — it’s not. It’s crimes, it’s claims of innocence, it’s penalties forever. And then-State Senator Obama approached Republicans and said, look, let’s fix this, let’s recognize the problem here, let’s fix it.

But it was very different than what I sense is happening today. What I sense is happening today is, “what is it going to take for you Republicans to vote for our bill?” That’s the subtext that I’m getting. My sense is that this is a problem of message, it’s not a problem with the messenger. You’ve got an incredibly skilled messenger who has been out these past several months in joint session speeches and a whole host of other venues, interviews, talking — you’ve all seen it, you’ve all participated, you’ve all listened — and I think the American people, when the conversation first began about expanding coverage, lowering cost, were actually hopeful.

And it wasn’t just a bumper sticker — I think they were actually hopeful about what was going to be happening. And they listened and they listened and they listened. And my sense — now, I can’t speak for every one of your districts, but in my district they’ve become increasing disappointed with what they have seen come out of this process.

And this is not a prop — this is the Senate bill. And my district says, you know what, that’s sure looking like just something that’s now being popped in the microwave, taken out, a little salt, a little pepper, some Republican bread crumbs on the top, and put it back in front of the public to say, well, do you like it now? And my district really doesn’t. I don’t know, I suppose you represent some districts that do.

And I think one of the problems, to get to this coverage issue, is that the premise of this bill is that coverage is expanded through Medicaid, welfare. Speaker Pelosi a couple of minutes ago — or a couple of hours ago, actually said that health care reform is entitlement reform.

SPEAKER PELOSI: Yes.

REPRESENTATIVE ROSKAM: Yes. I would put a brighter light on that and say it’s entitlement expansion. Think about what we’re doing. The CBO when they wrote to Harry Reid — wrote to Senator Reid a couple of months ago, they said, look, there’s about 15 million people that are going to be put on Medicaid. And Medicaid is a house of cards. Medicaid is not something that is serving the public very well.

The state controller in Illinois — and we all come from states with real trauma — the state controller in Illinois recently wrote that as bond rating agencies continue to downgrade Illinois rankings to the lowest in the nation, the state can’t afford further jeopardizing.

This bill, section 2001 of the Senate bill, takes away all of the flexibility as it relates to changes in Medicaid. That is making our states I think ultimately hidebound in how they approach these things. This is something that in my view isn’t sustainable.

Governor Brian Schweitzer of Montana said — let me give you a quick quote — “One of the least effective programs in terms of health care in the history of the country is called Medicaid. About 20 percent of America is on a Medicaid program and they would like to shift” — “they” meaning Washington — “would like to shift it and grow it to somewhere around 25 or 30 percent.”

Now, Medicaid is a system that isn’t working. Almost everyone agrees. But what Congress intends to do is to increase the number of people on Medicaid so that they can do it on the cheap. It isn’t working for anybody.

Look, the foundation of the expansion is Medicaid. And in my view, and I think the view of folks in my district and I think many, many people across America, it is a flawed foundation. And we can do much, much better. A Republican proposal that’s out there would reduce the number of uninsured by 3 million people.

So, look, you heard it today in many, many forms — this — you remember the old — in closing, you remember the old game you used to play as a kid, Etch A Sketch, and you’d start out with the Etch A Sketch, that little thing where you try and draw something and you dial the dials and over a period of time the more you dialed the more crazy it looked and then finally you’d say, oh, let’s just go like that and do the Etch A Sketch.

I’ll tell you what, a year’s worth of work and this is what has come up with? The American public, as far as the ones that I have heard from, are vehemently opposed to this. And they say, look, take the Etch A Sketch, go like this, let’s start over, let’s do incremental things where there’s common ground. I yield back.

THE PRESIDENT: I want to make sure that everybody gets an opportunity to speak. But I just want to caution everybody, it’s now 4:15 p.m. There are a number of folks who haven’t had a chance to speak. The question I had was, were there ideas about expansion beyond the 3 million that that was in Leader Boehner’s bill, and I didn’t get an answer on it — so in addition to, and it may be that the answer is that’s all we can do.

I should point out this one issue about Medicaid that I think that’s important. Most of the people we’d like to be in the exchange and giving them subsidies. And I think over time (inaudible) see as an evolution, if you created a large enough pool, where people could purchase it through an exchange the same way that members of Congress do.

The problem we’ve got right now is that very poor people, they’ve got coverage through Medicaid. And it’s somewhat flawed. There are problems with doctor reimbursements, there are problems long-term in terms of solvency both for the state and the federal level, so all those things need to be fixed. But the fact of the matter is if their kid gets sick, they can go to a doctor.

The people who are really left in the cold are working families who make too much for Medicaid and don’t have anywhere to go. That’s the group that right now is getting the worst deal. They’re paying taxes, they’re working, but they’ve got nowhere to go.

Now, for those 15 million people who’ve got nothing, I promise you they would say to themselves having some coverage through Medicaid is a pretty good deal. I’d prefer to have them in an exchange where over time we’ve got everybody in a pool, similar to the pool that members of Congress enjoyed. But that’s not the situation that we have right now. I just want to remind everybody though that the group that is being left out, because you threw out the word “welfare,” which is, you know, one that obviously most American people — they don’t want to be part of welfare — the fact of the matter is, is that very poor people right now have coverage that is superior to what a lot of folks who make a little more money, are working very hard trying to support their families, do not.

Now, I know that Max has been trying to get in for a while, but there are some other folks that haven’t had a chance to speak, so I want to call on them first. And then if I’ve got time, Max, I’ll allow you to wrap up.

But I’m going to go to Chris and Murray — Chris and Patty Murray on our side, as well as Charlie Rangel who want to speak, and what we’ll do is we’ll alternate to make sure that we’ve got — and I know that Joe Barton is interested in speaking, as well, and there may be a couple of other Republicans.

Go ahead.

SENATOR DODD: Well, thank you, Mr. President, and I’ll try and keep this brief and turn it over to Patty, so we’ll take the time for one person and divide it in two.

Let me first of all thank you as well and thank all of our colleagues who have done this. This has been tremendously helpful I think today.

It’s been said earlier — maybe it needs to be focused, as well — like many of you, like all of you here, in my state there are 31 hospitals, and they’re terrific people. Whether or not the quality of care is equal for everyone in this country is certainly questionable, but certainly the quality of the people who are our health care providers — the nurses, the doctors, and others — do an incredible job every single day.

And the sense — I was struck when the REPRESENTATIVE was talking about the death penalty issue that was debated some time ago in Illinois. I think most of us around this table here would agree today that every person, if they’re confronted with a legal problem has a right to a lawyer. That’s something we’ve accepted as a country.

It’s somewhat ironic, I suppose — and history may judge us accordingly — that while everyone was entitled to a lawyer, regardless of what you’ve been charged with, that you don’t have a right to a doctor. And yet at the same time we acknowledge that we provide care: If you show up in an emergency room, we take care of you. And that’s a great testimony about who we are as a people.

The problem is of course the costs associated with that. I think there’s a false assumption that that’s one group of people, and they’re out there, and they have no impact on what happens to those who have insurance today, and somehow they should be taking better care of themselves, they should quit smoking, they should eat better, they should get a job; that somehow the responsibility rests with them.

If you can accept that, which I don’t, the fact of the matter is that sector of our population affects everyone else. It costs us about $248 billion a year in lost productivity when you have increased numbers of uninsured people in the country.

At this very hour, there’s a cost with every single insured person in this country of roughly $1,100 a year to pay for that cost of that person showing up in that emergency room, or getting that care. That’s a hidden tax that Americans are paying today when people show up for that kind of support.

There are — today before we wrap up and go back to our offices and go back to our homes this evening here in the District of Columbia, 14,000 of our fellow citizens will have lost their health care today. And every day that we’re here debating and discussing this, 14,000 Americans lose their health care. Roughly six to eight people will have lost their lives today as we gather around this table because they’re uninsured, based on a Harvard study and National Science Foundation study; that we lose that many people on a daily basis because we lack — because they lack health insurance.

So there are tremendous costs associated with this. Henry said it well, Tom said it well, and Mr. President, you certainly encapsulize it very well. These are not segmented issues. And while incremental approaches are something I (inaudible) support and approach after 30 years here in dealing with major issues, but this issue defies incremental approach. You can’t get from one point to the next incrementally unless you deal with it holistically, and that’s really what we’re trying to do.

And you may disagree about whether or not we’re doing too much on mandates or too much here or there — and that’s a legitimate debate — but you can’t get to affordability, you can’t get to quality, you can’t deal with the major economic issues if you don’t deal with coverage. You just can’t. There’s no way to do it. You’ve got to have broadening coverage if you’re going to have any effort or any successful effort in reaching those questions.

Lastly, I’ll just say this to you. A guy in my state, Kevin Galvin (phonetic) — Kevin employs seven people, a maintenance operation in Hartford, Connecticut. He wanted to provide health care. And like the stories you’ve all heard, he lost a fellow of 24 years because the guy had a health care issue, he finally had to take less pay, took another job, because there was health care provided. But Kevin did more than just tell me a story about himself, Mr. President, and what happened to his seven employees because they couldn’t get health care.

He went out in my city in Connecticut and organized 19,000 small businesses, and they changed the law in Connecticut regarding pooling in small businesses, because here was a small business guy who wanted to take care of his people and watched tragically day after day what happened to individuals because he could not provide it for them any longer.

And I think people like Kevin Galvin exist in every district in every state who want to provide that health care, understand how valuable it is to them, their productivity, and of course the importance of their employees.

But coverage is the critical issue. We know that in the next 10 years — factually, Mr. President — in the next 10 years every state in this country will have a 10 percent increase in uninsured people. We know that in 30 states in our country in that same 10-year period there will be a 30-percent increase in the uninsured. And half the population under the age of 65 will at one point or another in the next 10 years be without insurance.

So it’s not some isolated group out there. This is the critical constituency that is — this is the lynchpin that holds all of this together. So coverage is absolutely critical.

REPRESENTATIVE BARTON: Thank you, Mr. President. I want to commend you for asking us to come here, and I will say that never have so many members of the House and Senate behaved so well for so long before so many television cameras. (Laughter.) So if we ever get to a conference committee, we may want you to be the moderator.

I do think, though, that there is a fundamental difference in the vision that you and your friends on the majority have put forward, and the vision that myself and those of us in the minority have put forward. It’s the fundamental role of government. We believe that we should use free markets to empower people and give them choices. And for the best of intentions, yourself and most of your allies in the Democratic Party seem to believe that the government, either through a mandate or through a regulatory requirement, knows better and will do better for health care for most Americans. Now, whether you have a mandate or simply give the Secretary of Health and Human Services the ability by regulation to require something, that’s a difference without — that’s a distinction without much of a difference.

So the six commonsense ideas that various Republicans have put out here is not incrementalism in the sense that it doesn’t go together, but it does not radically change the basic health care system of America. If you give the ability to sell insurance across state lines, and prevent a state from precluding it, if the insurance company can prove that it’s solvent and that it will pay the benefit, health care costs will go down in that state and premiums will go down.

There was a study just out that in the state of California health care premiums would go down 50 percent if Californians could buy insurance from Nevada or Oregon. If you create a catastrophic high-risk pool and put the cap on it that Leader Boehner did on his alternative on the House floor, and allow small businesses to create the kind of pools that we’ve talked about, you’re going to be able to give those Americans who can’t get insurance because of a preexisting condition and want it the ability to get into those things. And their premiums will not go up catastrophically. They will not go up astronomically.

And one of the things that we seem to have agreement on, according to yourself and Senator Durbin, is medical malpractice. Now, your proposal in the House bill and the Senate bill pay lip service to medical malpractice, but they don’t really do it. Again, if you take the Boehner proposal that was put together and put up on the House floor, and it’s based on what’s happened in Texas — in Texas, which put in medical malpractice reform in 2003 — premiums for medical malpractice have gone down 27 percent.
Texas has gained 18,000 doctors since this reform was put in. There are 55 rural counties in Texas that now have an obstetrician.

If that is extrapolated nationally, you’re not going to save the $54 billion that Senator Durbin alluded to and that yourself alluded to. If you combine the direct savings with the indirect savings, because the price of practicing defensive medicine goes down, you’ve probably saved $150 billion a year. Now, that’s real money.

So what we’re saying, Mr. President — we’re not talking about incrementalism. We’re talking about, as Leader Boehner said and Mr. McConnell — Senator McConnell said, let’s start over in the sense that we change the vision and work together to do the things that we agree upon, but do it in a way that doesn’t destroy the fundamental market system that’s made the American health care system the best in the world. And if we do that, we can make a deal.

Thank you, Mr. President. Thank you, Leader Boehner.

THE PRESIDENT: Joe, I’ll respond to you right (inaudible) because I think we should wrap it up.

You’re right, the proposal that John Boehner has put forward doesn’t radically change the existing system. And that I think is why 3 million out of the 30 million who don’t have coverage, or 40 million, don’t get coverage. The proposal that’s been put forward by the House and the Senate Democrats also doesn’t radically change it in the sense that the vast majority of people who currently have health care will still get it, it’s just they’ll see it a little cheaper. People who do not have coverage will start getting it. So that’s — it’s not — neither of these proposals are radical. The question is, which one works best for the American people? And that’s what we’ll see if we can determine.

We’re running short on time. I know that some folks are going to at some point have to get going. I am going to reserve the prerogative of making sure that everybody who has not had a chance to speak is allowed to speak, and then I will wrap up. That means that we’re probably going to go a little bit later than we had anticipated. But, as I said, by the standards of Washington, we’re still in the ballpark here.

I’m going to call on Charlie Rangel first. We’ll go to one of our Republican colleagues. Patty Murray is going to have an opportunity to speak. Again, there may be some comments — there may be some other Republicans who are interested in speaking. We’ll go to — we’re going to actually go to Ron Wyden first. Then, we’re going to go to another Republican. And we’re going to end with John Dingell, who was there when the idea of everybody having health care was first introduced by his father many decades ago.

REPRESENTATIVE WAXMAN: Mr. President, why don’t you just call on Republicans who haven’t talked, because some of them have talked numerous times?

THE PRESIDENT: I agree, but I want to make sure that they may want to respond to whatever is said. Go ahead, Ron.

SENATOR WYDEN: Thank you very much, Mr. President. And I think this has been a very constructive session. For the last six hours, we have essentially heard Republicans talk about incremental coverage and Democrats talk about comprehensive or broader kind of coverage. And I want to outline something that I think could bring both sides together for just a couple of minutes.

First, on the incremental point, the evidence shows that incremental reform not only does less, it costs more. And the experts that both Democrats and Republicans rely on have found this — the Lewin Group, for example, that Republicans quote from, they say that and both sides use them. Also, history. We have been doing incremental reform in this country since 1994. Since the blowup of the Clinton plan, that’s exactly what we’ve been doing, and costs have been gobbling up everything in sight in the private sector and in the government.

So I would submit that instead of this debate about incremental reform or comprehensive reform, we could all be for real reform. And real reform, in effect, changes the incentives that drive the system and particularly empower the consumer.

Mr. President, I’ve been very pleased that you’ve constantly been coming back to the system for members of Congress. Folks, all of us can fire our insurance company, every one of us. And as far as I’m concerned, we’ve got to stay in this battle until everybody in the United States has that right to hold the insurance companies accountable and to fire them.

And one of the promising points you made this afternoon, Mr. President, that I appreciate is the point on interstate shopping, because this is another opportunity, in my view, done properly — properly to empower the consumer. Now, colleagues, our system — the one that we enjoy — already allows interstate competition for health insurance. That’s the way the federal system works right now. And there are good consumer protections.

So, Mr. President, when you made that offer to all of us today to work with us on this, not only am I going to follow up on what I think is a very gracious offer to try to bring both sides together, it allows us to build on the exchanges that we have today, which begin to empower people with more choices and competition. And if we just keep building on that, starting with this effort to bring both sides together on interstate competition, looking in my view at the federal employee system to do it, I think we can resolve a lot of our differences. So I appreciate the opportunity to speak, Mr. President. I want colleagues to know that I’m going to be following up with both sides of the aisle this afternoon and your administration to bring this group together.

SENATOR McCONNELL: Mr. President, all of my members have had a chance to speak at least once, several of them a number of times. Jon Kyl reminds me that the HSAs, for example, are not exactly for rich people; that the median income of a user of a HSA is $69,000 a year. All of us are representatives of the American people, but I have a feeling we haven’t been listening to them very carefully.

REPRESENTATIVE Roskam mentioned what the people in his district think, and I expect all of you are experts on what the people in your districts think. But we know from the polling that’s been done in this country how the American people feel about this 2,700-page bill. We know how they feel about it. This is not a close call. If you average all of the polls in America, we know that the American people oppose this proposal by — on an average of 55 to 37 percent.

They have also been asked — and we keep reading in the newspaper that where we’re headed next is to the reconciliation approach. Well, Gallup also asked that question. It explained to the American people what it meant so they understood what this word that we use around Washington actually means. And in the Gallup poll, the American people were opposed using that, 52 to 39 [percent].

So this has been a fabulous discussion, Mr. President. We have a lot of experts around the room. But I think it’s really important, since we represent the American people, that we not ignore their view on this. They have paid attention to this issue like no other issue since I have been in the United States Senate. Health care is a uniquely personal issue. Obviously, you get more interested in the subject the older you get. But every American cares deeply about the quality of their health care, and access to health care and cost of health care. They have followed this debate like no other, and they have rendered a judgment about what we have attempted to do so far.

The solution to that is to put that on the shelf and to start over with a blank piece of paper and go step by step to see what we can agree on to improve the American health care system, which is already — as all of us agree — the finest in the world.

THE PRESIDENT: I’m just going to make this remark, and then I’m going to call on Patty Murray — I’m going to save the two lions of the House here for the end — because there’s been a lot of comments from every Republican about the polls and what they’re hearing from their constituents. And, as I said, I hear from constituents in every one of your districts and every one of your states. And what’s interesting is actually when you poll people about the individual elements in each of these bills, they’re all for them. So you ask them, do you want to prohibit preexisting conditions? Yes, I’m for that. Do you want to make sure that everybody can get basic coverage that’s affordable? Yes, I’m for that. Do you want to make sure that insurance companies can’t take advantage of you and that you’ve got the ability, as Ron said, to fire an insurance company that’s not doing a good job and hire one that is, but also, that you’ve got some basic consumer protections? Yes, we like that.

So polls I think are important in taking a temperature of the public. If you polled people and asked them, is the system working right now and should we move forward with health reform, they’d also say yes to that. And my hope had been, and continues to be, that based on this conversation there might be enough areas of overlap that we could realistically think about moving forward without — without a situation in which everybody just goes to their respective corners and this ends up being a political fight, because this is something that really has to be solved.

We’ve got three people who have not had an opportunity to speak today. If you don’t mind, I will — would like to, in the interest of time, just go ahead and let each of them speak. If there’s an intervention that somebody on the Republican side wants to make, then I will recognize them. Then I will allow anybody of your choice, Mitch, to wrap things up. I think Speaker Pelosi may want to say just a quick summary of what she’s thinking. And then I will talk a little bit about next steps. And if everybody could keep their remarks relatively brief, that’d be very helpful.

Patty.

SENATOR MURRAY: Mr. President, thank you. And this has been I think a very good discussion. And I think all of us come to this table today having heard a lot of stories and talked to a lot of people and bring their passions with us today. And I certainly am one of those. And every time we talk about this — every time I think about this, I remember a little boy that I met last spring who is 11 years-old, whose name was Marcelis (ph). And he told me that his mom, single mom, taking care of him and his two younger sisters, was going to work every day, had a job managing a fast-food restaurant, was doing okay but she got sick. And when she got sick she had to take time off from work and because she was missing so much work she lost her job. When she lost her job, she lost her health care. And because she lost her health care, she couldn’t get in to see a doctor, and sadly, Marcelis’s mom died.

I think about him every time we talk about this bill. And what happened to her is happening to so many Americans who when they get sick today don’t have any choices. They have nowhere to go. Either they don’t have insurance or they’ve been denied insurance because they don’t — because they have a preexisting condition or they’re a small business whose premiums have gone up so dramatically that they can no longer afford to provide it for their employees. Too many Americans today are in a box and they don’t have a choice.

Frankly, it’s why so many Americans today are passionate about a public option. It was a choice for them that they felt was important to them. But in the bill that you have presented and that we’ve been working on that is so important is it finally gets some people out of that box of no choices — by giving them an exchange that they can go to, by taking care of the insurance reforms so they’re not denied coverage, by opening up community health centers so people have choices, by making sure that we lower the cost for all Americans because when we provide coverage for 30 million Americans it lowers the cost of everyone who has insurance today by $1,000 a year a family — this is why this is so important.

And what I have listened for today is whether the alternative proposal that has come before us gives people those choices that they need. And that’s what I’m listening for and I go back to Marcelis and I think, will that proposal make sure that nobody loses their mom again because they didn’t have a choice? And that’s why it’s so important that we move forward with what we have and open that door for so many Americans.

THE PRESIDENT: Thank you.

SENATOR McCONNELL: Mr. President, Dr. Coburn.

SENATOR COBURN: If we don’t think about what the key goal is — the key goal is to reconnect purchase and payment so we become good purchasers. Whether we create — what system we do, if we don’t reconnect the mechanism of payment with purchase, we’re not going to get good value out of our health care system. And I outlined one out of every three dollars that doesn’t help anybody get well, doesn’t prevent them from getting sick. And there’s enough potential there in that pool of money that we don’t have to have the government run it. What in fact we can do is we can create and allow that money for everybody to have the kind of access that Senator Murray wants that individual to have.

The thing that I think is — draws us apart is the level of involvement in the government in making those choices. And I would just put forward to you that we ought to have another talk like this as we can get closer and closer on some ideas because we all want the same thing, but how we get there, whether or not we’re in charge of it or the individual patient is in charge of it, personally making their own choices with the asset value that is capable, based on what we’re already spending in health care. We don’t need to spend a penny more in health care in this country. What we need to do is spend it much more wisely and much more effectively.

THE PRESIDENT: I’ll pick up on some themes in my close. Charlie Rangel.

REPRESENTATIVE RANGEL: Thank you, Mr. President, and I appreciate the fact that you saved the best for last.

THE PRESIDENT: Absolutely. (Laughter.)

REPRESENTATIVE RANGEL: I had really hoped that when we came here that we were really going to push over the top. We are so close to national health insurance, we are so close to allowing people that go to work every day and don’t know what can happen to them when they lose their job and lose their health insurance. I know that they call the Senate the upper house, but I was amazed how it seems as though they believe the American people only listen to those from Wyoming and Kentucky. But having said that, for my New Yorkers, even though we have more self confidence than we need, I would want them to know that they are Americans and that we do listen to them and that the states that oppose this great plan, doesn’t speak for all of America.

Having said that, some people have called those who oppose us as being the “party of no.” I don’t think so, notwithstanding the fact we got five Republicans from the Ways and Means Committee here at your summit. Now, we spent hundreds of hours in three committees and Ways and Means and there wasn’t one bill before us. And I would think that instead of taking the President’s time, that this is where the House and the Senate would take care of legislative business, especially if we agree on 70 percent. For God’s sake, then, for the 10 or 20 percent, why do you say scrap what we got unless it ends up with that you have made up your mind that we’re not going to have a health bill?

And then I would say that most all of America would find it not more difficult to understand why the bill is so big, or why we use reconciliation. I think one of the big problems America would have is, why does it take 60 to get a majority? And I have to explain, well, that’s the Senate and they’re different than most Americans in understanding it.

So what I would hope would happen is that we leave here not thinking that we’re going to start all over. We can’t get back those times. This is the last year for a whole lot of people in the House of Representatives who we believe we represent the people, too. Why can’t we take what we’ve agreed to? I mean, sick people, scared people, are not Republican and Democrats. They’re Americans. And you’ve made it abundantly clear that you have the same sensitivity, you recognize the fiscal crisis, you know what can happen to our country if we’re not educated, if we’re not strong in a healthy way. Have staff or somebody bring together those issues that cannot be contradicted in terms of what you want. And I know you want more than just 3 million people insured. You can explain why it’s difficult for you to do it. But I know you would want to achieve having most all Americans or all Americans with the same health benefits because that’s so important.

And then, Mr. President, after we start learning to agree with each other, and it’s not a question of no but it’s the Congress working its will for the good of people, then we can work out — and God knows Mr. Camp and I have tried desperately hard, and Jim McCrery before him — to realize people aren’t concerned with the debate. They’re concerned with what are we going to produce.

And I don’t care what your color is, I don’t care what your party is, that if you’re sick you’re sick, and you don’t check out the doctor. And they’re not going to check out whether or not you’re Republican or Democrat.

So I just hope that we can change this to a positive thing where you can say let’s leave here at least talking about what we agree on. Let’s stop knocking each other as who’s the smartest and who’s the most patriotic. And let’s really, then, confine the public argument to where we disagree.

And rest assured, I can assure you that they won’t be concerned with how big the bill was. I have no clue as to how big the Social Security bill was, how large, how many pages was in the Medicare bill. And I don’t really think that someone sick in the emergency room is concerned about the size of the bill that we are trying to help them with.

So I appreciate this.

THE PRESIDENT: John Dingell.

REPRESENTATIVE DINGELL: Mr. President, thank you. And God bless you for your leadership in this matter. The country desperately needs you and desperately needs this legislation. I saw the cartoon, two people are sitting down, and one of them says, “Terrible news. Our health care rates are going to go up 40 percent.” The other guy says, “Don’t worry, good news is you’re not concerned because you have preexisting conditions.” (Laughter.) This solves both problems, the bill. And Mr. President, again, we desperately need your lead.

Now, having said that, when my dad started out on this years ago, Harry Truman said, you know the reason people don’t have health care in this country? They can’t afford it. And he was right. And it’s still the case today.

I saw this morning a statement that was made with regard to starting over. This comes from a respected Republican leader, Governor Schwarzenegger of California, February 23, 2010: “I think any Republican who says you should start from scratch, I think that’s bogus talk and that’s partisan talk.”

I think we need to buckle down and get to the business of solving the biggest problem that this country has coming down the road at us. In 2025, the cost of a family’s health insurance is going to double — $25,000. I don’t know anybody who can afford that. You can argue about Cadillac plans and other nonsense. That’s not going to be important. And in 2080, the cost of all of our health care is going to equal the gross domestic product. It’s a recipe for disaster.

We have much in common, I want you to know, and I hope and pray you will take a look. We cover young adults under their parents’ — under their parents’ insurance. That’s a Republican offer. We prohibit dropping insurance coverage when the patient gets sick, but we don’t — and the Republicans do, too, but they don’t cover preexisting conditions. Both of us prohibit annual and lifetime limits. High-risk pools, we have and they have.

But high-risk pools carry with them some risk, because it constitutes an incentive for a race to the bottom, whereby people will move their insurance coverage to the place where they have the least regulation and the least protection for the consumers.

And it also includes, and amongst the other 14 items where we’re agreed on, is the availability of health savings accounts. There are a lot of other things here that we have and we need.

I would say that I’ve seen some of my friends who I knew before they were virgins. They were pushing, for example, use of the extraordinary budgetary mechanism, as to get this decided by 51 votes. Seems like a great idea, if — and I’m curious, why in the name of common sense are we being so fussy about having the decisions in the people’s House and the people’s Senate decided on the basis of a simply majority, 51 votes? And if there’s something wrong with that, I wish somebody would tell me why we ought not give the people that kind of representation.

I would note that also mandatory coverage, mandates. That was in a bill introduced by my good friend Bill Thomas, Chairman of the Ways and Means Committee, and 20 members of the U.S. Senate. They said — and they were not fussy about that. And I think we ought to look to see, here we have a chance to serve the people. I have people coming to my office with tears in their eyes. They can’t get coverage. They have preexisting conditions. A young dental surgeon I knew couldn’t get health care. Why? Because she had breast cancer years before; she couldn’t get care. And I’ve seen a lot of other cases like that, people who would have drive-through pregnancies or drive-through mastectomies, and all manner of high-handed abuse by the insurance companies.

I’m always surprised when I can find somebody that’s defending the insurance companies after the things that they do to the ordinary people in this country. They could cancel your insurance policy while you’re on the gurney headed into the operating room. Somebody would — if somebody would explain that to me, I would be deeply grateful.

But the fact of the matter is, we have a chance to do something that Dan Webster one time observed. I thought it was — I thought it was a very useful thing that he said. And I think we ought to — he said, “Let us see whether we also, in our day and generation, may not perform something worthy to be remembered.” It’s on — Madam Speaker, as you well know, it’s on the wall of the House of Representatives. It’s there for us in the House, and my colleagues in the Senate will know it, those few who I see again and serve with us will recognize that as something.

We have before us a hideous challenge. The last perfect legislation that was presented to mankind was delivered to the Israelis at the base of Mount Sinai. It was on stone tablets written in the fingers of God. (Laughter.) Nothing like that has been presented to mankind since. What we’re going to do is not perfect, but it’s sure going to make it better, and it’s going to ease a huge amount of pain and suffering at a cost which we can afford, which has been costed out by the Office of Management and Budget — the Congressional Budget Office, saying, it’s budget-neutral and in fact reduces the budget.

I beg you, my friends, let us go forward on this great task.

THE PRESIDENT: Thank you, John.

REPRESENTATIVE DINGELL: Thank you, Mr. President.

THE PRESIDENT: Speaker Pelosi wants to say a brief word. John, do you want to say anything in closing? And then I will wrap up.

Nancy.

SPEAKER PELOSI: Thank you very much, Mr. President. As one who has abided by the three and a half minute, I’m going to take a few seconds more now in closing to extend thanks to you, Mr. President, for bringing us together, for your great leadership, and without it, we would not be so very close to affordability, accountability for the insurance companies, and accessibility for so many more Americans to improve their health care, to lower their cost.

Mr. President, I harken back to that meeting a year ago. At that time, Senator Grassley said — questioned you about the public option. And you said, “The public option is one way to keep the insurance companies honest and to increase competition. If you have a better way, put it on the table.”

Well, I bring that up because we come such a long way. We’re talking about how close we are on this, how far apart we are here. But as a representative of the House of Representatives, I want you to know that we were there that day in support of a public option, which would save $120 billion, keep the insurance companies honest, and increase competition.

We’ve come a long way to agreeing to a Republican idea — the exchanges. Senator Enzi has been a leader in that. Senator Snowe, along with Senator Durbin, had legislation to that effect — bipartisan. It caused the insurance companies opposed the public option. They couldn’t take the competition.

We have in our bill market-oriented, encouraging to the private sector, initiatives. I think the insurance industry, left to its own devices, has behaved shamefully. And we must act on behalf of the American people. We have lived on their playing field all this time. It’s time for the insurance companies to exist on the playing field of the American people.

I believe I have news for some of my colleagues, because we have very much more in common. Senator Coburn, you had so many positive suggestions, which I didn’t hear much else of, but from you we did. And I think you’d be pleased to know that after much debate in our House, we came up with value not volume; others have called it quality not quantity in terms of utilization, over-utilization. Senator McCain, when you talk about Florida, we’re talking about addressing the regional disparities in terms of compensation and health care.

So we have addressed many of these issues in the bill. I think it’s really important to note, though, and I want the record to show — because two statements were made here that are not factual in relationship to these bills. My colleague, Mr. — Leader Boehner, the law of the land is there is no public funding of abortion and there is no public funding of abortion in these bills. And I don’t want our listeners or viewers to get the wrong impression from what you said. Mr. Camp — Mr. Camp, you said that the Medicare cuts in this bill cut benefits for seniors; they do not. They do not.

So I want the record to show, just in those two cases, where we may have differences of opinion and of approach and evaluation of the value of different things, but certain things are facts about our bills that I cannot let the opposite view stand when they are stated.

Yes, it’s hard to do this. The misrepresentation campaign that has gone on about these bills, it’s a wonder anybody would support them, as Mr. Waxman said. But the fact is this, the President said many of these provisions on their own are largely supported by the American people.

So this will take courage to do. Social Security was hard. Medicare was hard. Health care reform for all Americans — insurance reform is hard. But we will get it done. And as we leave this debate I think that many of the differences that we have are complicated and they’re legitimate. They’re differences of opinion about the role of government and the rest. But I think it’s really clear in one point that the American people understand very clearly, they understand that there should be an end to discrimination on the basis of preexisting conditions. The proposals that we have put forth end discrimination on the basis of preexisting conditions; the Republican bill does not.

With that, Mr. President, I thank you again for the opportunity to discuss the differences and to try to find some common ground on this.

THE PRESIDENT: Well, listen, this has been hard work. And I want to, first of all, thank everybody for being here and conducting themselves in an extraordinarily civil tone. And as I said, given the number of folks that were around this table, the fact that we’re only an hour late is — beats my prediction. (Laughter.)

Here’s what I’d like to do — and I’m going to take about 10 minutes. I want to go through where I think we agree, and I want to summarize where I think we disagree. And then I’ll address some of the process issues that have been brought up by a number of the Republicans.

We agree that we need some insurance market reforms. We don’t agree on all of them, but we agree on some of them. I think that if you look at the ones that we don’t agree on — since there’s been a lot of reference to what the American people want — it turns out that the ones that are not included in the Republican plans right now, but are included in the Democratic plans, are actually very popular.

I know there’s been a discussion about whether government should intrude in the insurance market, but it turns out that on things like capping out-of-pocket expenses, or making sure that people are able to purchase insurance even if they’ve got a preexisting condition, overwhelmingly people say the insurance market should be regulated.

And so one thing that I’d ask from my Republican friends is to look at the list of insurance reforms and make sure that those that you have not included in your plans right now are ones in fact that you don’t think the American people should get. Because I strongly believe in these insurance reforms. I’ve talked to too many families who have health insurance and find out that what they have does not provide them with the coverage they needed and they end up being bankrupt, or they end up going without care, or they get care too late, as was the case in the story that Patty Murray mentioned.

The second thing I think we agree on is the idea that allowing small businesses and individuals who are right now trapped in the individual market and as a consequence have to buy very expensive insurance and effectively oftentimes just go without insurance could be solved if we allowed them to do what members of Congress do, which is be part of a large group.

Again, the idea of an exchange is not a government takeover; it is how the market works, which is if you have a lot of purchasing power you get a better deal. That’s how Walmart drives its prices down, because everybody who wants to supply Walmart — Walmart tells them, you give me the best deal possible. And as a consequence, the supplier gives them a much better deal than they do the mom-and-pop shop on the corner. Well, we should be able to give small businesses and individuals who are self-employed, who aren’t able to get insurance through a large employer, to have that same deal.

It sounds like we’ve got some philosophical difference as to whether there should be some minimum benefits in that exchange, some baseline of coverage. Again, there’s a baseline of coverage for members of Congress. And the reason we set that up is because we want to make sure that any federal employee who is part of this big pool is getting good, quality coverage — not perfect coverage, not gold-plated coverage, but adequate coverage. It may be — and I’d ask my Republican colleagues to look and see, is that an area that can be resolved.

There has been a lot of discussion and one of the main tools the Republicans have offered to drive down costs is purchasing insurance across state lines. This is an idea that is embodied in the House and Senate bill, but, again, the details differ. The approach that John Boehner and some of the Republicans appear to take is to say, let’s just open things up; anybody can buy anything anywhere regardless of what state insurance laws are, and that will drive competition and cost.

The philosophical concern I have on that is that you potentially get what’s been referred to as a race to the bottom. And for people who may not be following the intricacies of the insurance market, let me give an example that people understand, and that’s credit cards.

In the credit card market, part of what happened was we ended up allowing people to get credit cards from every other — whatever state, and there were a few states that decided, you know what, we’re going to have the least restrictions on credit card companies that we could have. And what ended up happening was that every single credit card company suddenly lo and behold started locating in that state which had the absolute worst regulations in consumer protections, and all these fees and practices that people don’t like, folks weren’t happy about.

So the question I’m going to have is, is there a way for us to deal with the interstate purchase of health insurance, but in a way that provides, again, some baseline protections, because what we don’t want is a race to the bottom. We want everybody to have the basic protections that make sense.

And that’s not a big government takeover. That is a standard thing that we do in almost every area of life. We protect people with respect to the food that they buy, with respect to the drugs that they purchase. We license and regulate the medical profession because we don’t think anybody should just be able to cut somebody open. We want somebody like Tom or John to actually know what they’re doing before they start practicing medicine. And the same should apply when it comes to how we think about insurance.

Medical malpractice has been mentioned. Now, look, let me be honest. This is something historically that Democrats have been more resistant to than Republicans. I will note that when we had a Republican President and Republican control of the House and Republican control of the Senate, somehow it didn’t happen, and I’m surprised, but we —

SENATOR ALEXANDER: We needed 60 votes in the Senate, too, Mr. President. (Laughter.)

THE PRESIDENT: See there? So as a consequence, what I have suggested is that we explore building on what we’ve already done administratively without law, asking Kathleen to help states come up with new ideas. I’ve suggested, well, let’s take a look at Tom, the suggestion you had, that gives states even more incentive to start thinking about reducing defensive medicine. I have to tell you, Joe Barton, that how you got from $5 billion to $150 billion, I didn’t quite follow the math. It sounded — I’m not sure you did, either, but it’s okay. But here’s my commitment, is that if folks were serious about getting this done, I’d be interested in seeing if we could work on something.

Now, I actually agree with Dick Durbin with respect to hard caps because of the story that he told about the woman who burned her face. I think there are situations in which there is actually a very severe problem, and I would distinguish that between some of the frivolous lawsuits that are out there that really do create a defensive medical problem, and OBGYNs are the ones who get hit the hardest because people are so sympathetic when a child is born with severe disabilities, and they can just be crippling on OBGYNs. The same is true for neurologists and so forth. So there may be some ways that we can work on that.

Now, I guess what I’m saying is I’ve put forward then very substantial ideas that are embraced by Republicans. Peter, they’re not — I forget what metaphor you used about — before you popped it in the microwave, whether it was bacon bits or sprinkles or — breadcrumbs, that was what it was. When it comes to the exchange, that is a market-based approach, it’s not a government-run approach. There were criticisms about the public option; that’s when supposedly there was going to be a government takeover of health care, and even after the public option wasn’t available, we still hear the same rhetoric. And it turns out that what we’re now referring to is we have an argument about how much we should regulate the insurance industry.

We have a concept of an exchange, which previously has been an idea that was embraced by Republicans before I embraced it, and somehow suddenly it became less of a good idea.

With respect to the most contentious issue, I’m not sure we can bridge the gap, and that’s what we’re going to have to explore and that’s the issue of how do we provide coverage not only for people who don’t have health insurance right now but also for people who have preexisting conditions and are being priced out of the market, or potentially lose their jobs and will find themselves in a situation where they don’t get coverage.

An interesting thing happened a couple of weeks ago, and that is a report came out that for the first time it turns out that more Americans are now getting their health care coverage from government than those that are getting it from the private sector. And you know what, that’s without a bill from the Democrats or from President Obama. Has nothing to do with “Obamacare.” It has to do with the fact that employers are shedding employees from health care plans. And more and more, folks, if they can, are trying to get into the Social Security system and the Medicare system earlier through disability or what have you, so that they can get some help.

The point that Tom Harkin made, the point that Chris Dodd made, the point that Henry made, and a number of other people made, I think is very important to understand. I did not propose and I don’t think any of the Democrats proposed something complicated just for the sake of being complicated. We’d love to have a five-page bill. It would save an awful lot of work. The reason we didn’t do it is because it turns out that baby steps don’t get you to the place where people need to go. They need help right now.

And so a step-by-step approach sounds good in theory, but the problem is, for example, we can’t solve the preexisting condition problem if we don’t do something about coverage.

Now, it is absolutely true — and I think this is important to get on the table, because we dance around this sometime — in order to help the 30 million, that’s going to cost some money. And the primary way we do it is to say that, for example, people who currently get all their income in capital gains and dividends, they don’t pay a Medicare tax, even though the guy who cleans the building for them does on his salary or his wages.

And so what we say is, if you make more than $250,000 a year if you’re a family and your income is from those sources, then you should do — you should have to do the same thing that everybody else has to do. Somebody mentioned the fact that we say to small businesses — I think Jon Kyl, you said, we’re taxing small businesses. Look, we exempt 95 percent of small businesses from any obligations whatsoever because we understand that small businesses generally have a tough time enough — they don’t need any more government burden.

What we do say is, if you can afford to provide health insurance, you have more than 50 employees, meaning you’re in the top 4 percent of businesses, and you’re not providing coverage and you’re forcing other businesses or other individuals to pick up the tab because your employees are either going to the Medicaid system or they’re going to the emergency room — we don’t think that’s fair. So we say, you’ve got to pony up some. It’s not an employer mandate. It just says you’ve got to pay your fair share, because otherwise all of us have to pick up the tab. And that, by the way, contributes to the overall deficit that Medicaid is running.

In fact, most small businesses through this program get huge subsidies by becoming members of the exchange. That’s where the money is going. The money is not going to some big welfare program — the money is going to give tax credits to small businesses, tax credits to those who are self-employed, to buy into this pool. And that’s not a radical proposition; it’s consistent with the idea of a market-based approach.

And finally, with respect to bending the cost curve, we actually have a lot of agreement here. This is an area where if I sat down with Tom Coburn I suspect we could agree on 95 percent of the things that have to be done. Because the things you talk about in terms of — and I wrote some of them down — in terms of reducing medical errors, in terms of incentivizing doctors to coordinate better and work in groups better, in terms of price transparency, improving prevention — those are all things that not only do I embrace but we’ve included every single one of those ideas in these bills.

Now, the irony is that that’s part of where we got attacked for a “government takeover” because what happened was when we set up the idea of a MedPAC, which is basically a panel of doctors and health care experts who would recommend ways to make the delivery system better so that we can squeeze out that one-third in Medicare and Medicaid that’s wasted — a Republican idea — that was part of the ammunition you all used to say that the government is going to take away your health care.

So if we’re serious about delivery system reform, if we’re serious about squeezing out the waste that Tom Coburn referred to, you should embrace those mechanisms that are in this bill.

I will end by saying this. I suspect that if the Democrats and the administration were willing to start over and then adopt John Boehner’s bill, we’d get a whole bunch of Republican votes. And I don’t know how many Democratic votes we’d get, but we’d get a whole bunch of Republican votes.

The concern I think that a lot of the colleagues, both in the House and the Senate, on the Democratic side have, is that after a year and a half — or more appropriately after five decades — of dealing with this issue, starting over they suspect means not doing much or doing the proposal that John Boehner or other Republicans find acceptable; and that it’s not possible for our Republican colleagues to move in the direction of, for example, covering more than 3 million people; it’s not possible to move more robustly in the direction of dealing with the preexisting condition issue in a realistic way; it’s not possible to make sure that we get people out of a high-risk pool and get them into a situation where, as Tom Harkin put it, healthy people, young people, rich people, poor people, old people, sick people — everybody is part of a system that works.

That I think is the concern. Having said that, what I’d like to propose is that I’ve put on the table now some things that I didn’t come in here saying I supported, but that I was willing to work with potential Republican sponsors on. I’d like the Republicans to do a little soul searching and find out are there some things that you’d be willing to embrace that get to this core problem of 30 million people without health insurance and dealing seriously with the preexisting condition issue.

I don’t know, frankly, whether we can close that gap. And if we can’t close that gap, then I suspect Mitch McConnell and Harry Reid, Nancy Pelosi and John Boehner, are going to have a lot of arguments about procedures in Congress about moving forward. I will tell you this, that when I talk to the parents of children who don’t have health care because they’ve got diabetes or they’ve got some chronic heart disease, when I talk to small businesspeople who are laying people off because they just got their insurance premium, they don’t want us to wait. They can’t afford another five decades.

And the truth of the matter is, is that, politically speaking, there may not be any reason for Republicans to want to do anything. I mean, we can debate what our various constituencies think. I know that — I don’t need a poll to know that most of Republican voters are opposed to this bill and might be opposed to the kind of compromise we could craft. So it would be very hard for you politically to do this.

But I thought it was worthwhile for us to make this effort. We’ve got a lot of other things to do. I don’t think, Tom, that we’re going to have another one of these because people don’t have seven, eight hours a day to work some of these things through.

What I do know is this: If we saw movement — significant movement, not just gestures — then you wouldn’t need to start over because essentially everybody here knows what the issues are. And procedurally, it could get done fairly quickly. We cannot have another year-long debate about this.

So the question that I’m going to ask myself and I ask of all of you is, is there enough serious effort that in a month’s time or a few weeks’ time or six weeks’ time, we could actually resolve something. And if we can’t, then I think we’ve got to go ahead and make some decisions and then that’s what elections are for. We have honest disagreements about the vision for the country and we’ll go ahead and test those out over the next several months till November.

All right? But I very much appreciate everybody being here. Thank you for being so thoughtful. And hopefully we’ll all keep our constituents in mind as we move forward. Thank you, everybody. (Applause.)

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