June 8, 2010 President Barack Obama this week met
with senior citizens at the Holiday Park Multipurpose Senior Center in
Wheaton, Maryland, to discuss and answer questions about how the
Affordable Care Act will effect seniors and their health care. The
complete text of his remarks and the Q & A are below.
Senior citizens were among the most out spoken
critics of the Presidents health care reform efforts, although, much of
the outrage appears to have been based more on lack of information about
the final bill than on the provisions in the law.
Assisting the President at the meeting was Kathleen
Sebelius, Secretary of Health and Human Services.
I'm looking forward to taking some of your
questions, but first, what I want to do is say a few brief words about
the Affordable Care Act that we passed a couple months back, and what it
means for America's seniors.
It's hard to imagine today, but just two
generations ago, millions of our seniors went without basic health care
coverage. Millions. It wasn't right. It wasn't reflective of our
values and who we are. So rather than allow that reality to continue,
we made a promise to America's seniors that you can live out your golden
years with some basic peace of mind and health coverage that you can
count on. That was the promise of Medicare.
The Affordable Care Act renews and strengthens that
promise. This new law recognizes that Medicare isn't just something that
you're entitled to when you reach 65; it's something that you've
earned. It's something that you've worked a lifetime for, having the
security of knowing that Medicare will be there when you need it. It's
a sacred and inviolable trust between you and your country. And those
of us in elected office have a commitment to uphold that trust - and as
long as I'm President, I will.
And that's why this new law gives seniors and their
families greater savings, better benefits and higher-quality health
care. That's why it ensures accountability throughout the system so that
seniors have greater control over the care that they receive. And
that's why it keeps Medicare strong and solvent -- today and tomorrow.
Now, you've just heard Fran's story. When Fran was
diagnosed with breast cancer, the cost of her medication surpassed the
Medicare Part D coverage limit -- but it didn't reach the catastrophic
coverage threshold. So she found herself in this coverage gap called
the "doughnut hole," where she was forced to pay the entire cost of the
medicine she needed out of pocket. That came to thousands of dollars,
forcing her and her husband to cut back everywhere else.
And I think everybody here understands Fran's story
is not uncommon. I've heard others like it all across this country, and
I read them -- read about it when I read letters from so many of you at
night. Those stories -- your stories -- are why we passed this law in
the first place -- to ensure that we don't have to keep on telling this
same story.
Now, this debate got pretty contentious at times
last year. I think you remember. (Laughter.) And just when you were
looking for accurate information about what this reform would mean for
you, there were a lot of opponents of health care reform generally that
sought to deny you that information. And they ran some pretty nasty
rumors in hopes that it would scare folks. I know that's hard to
imagine in politics -- (laughter) -- but that's what happened.
And we had seen it before. In the 1930s, when more
than half of our seniors couldn't support themselves and millions saw
their savings vanish, there were a number of opponents who argued that
Social Security was going to be socialism. In 1965, plenty of folks
warned that Medicare was going to lead to a government takeover of the
health care system. Same argument that was made earlier this year and
last year. We found out that those warnings had no anchor in reality,
and neither do the hysterical claims about this law.
So here's the truth: First and foremost, what you
need to know is that the guaranteed Medicare benefits that you've earned
will not change, regardless of whether you receive them through Medicare
or Medicare Advantage. Your guaranteed benefits will not change.
Eligibility won't change. Medicare will continue to cover your costs
the way it always has.
If you like your doctor, you can keep your doctor.
In fact, we're taking steps to increase the number of primary care
physicians so that seniors get the care that they need. And I'm
committed to reforming the way in which we compensate doctors under
Medicare, because right now it doesn't make any sense.
I don't think -- some of you may be aware of the
fact that we've got this patchwork system where Medicare doctors each
year have to see if they're going to get reimbursed properly or not.
And we've got to change that, and that's something that I'm committed to
doing. And I'm going to keep fighting for doctor pay that is more
cost-effective and efficient, and I urge Congress to pass a short-term
fix today and then we need to fix this thing over the long term
tomorrow.
So those are the facts. What you'll see through
this new law are new benefits, new cost savings, and an increased focus
on quality to ensure that you get the care that you need. And we're
moving quickly and carefully to implement this law so that you begin to
see some of these savings immediately.
Case in point: Beginning this week, tens of
thousands of seniors who fall into the doughnut hole, like Fran, will
receive a $250 rebate check to help you cover the cost of your
prescriptions. That will happen immediately -- that's starting now.
(Applause.) Each month -- and what's going to happen is, each month, as
more seniors hit the doughnut hole, more and more checks will hit the
mail -- helping more than 4 million seniors by the end of this year.
Now, beginning next year, if you fall into the
coverage gap, you'll get a 50 percent discount on the brand-name
medicine that you need -- 50 percent. (Applause.) And by 2020 -- it's
being phased in, but by 2020 this law will close the doughnut hole
completely. The doughnut hole will be gone. It will be gone.
(Applause.)
Now, that's not all. Beginning next year,
preventive care -- including annual wellness visits for Medicare
beneficiaries, certain screening services like mammograms -- will be
free, because the best way to prevent a serious illness is to diagnose
it early.
This law also gives us the power to see to it that
insurance companies don't raise your rates just to pad their profits.
(Applause.) Last week, Secretary Sebelius reminded insurance companies
that we've got the authority to review and reject unreasonable rate
increases for Medicare Advantage plans, and she put them on notice that
we will exercise that authority.
Finally, because seniors are more frequently
targeted by scam artists, we made sure the new law gives us stronger
tools to target criminals. And I want to send a notice to all who would
swindle and steal from seniors and the Medicare system: We are going to
find you, we will prosecute you, and we will ultimately prevent those
crimes from happening ever again. (Applause.)
Part of the reason this is so important is because
we've been receiving some outrageous reports from around the country of
people trying to scam seniors out of Medicare. They'll call asking for
a Medicare number or a Social Security number or bank account
information, claiming it's necessary to re-enroll in Medicare or to sign
up for "new Medicare cards." Some even go door to door, claiming
they're selling new government policies. It's appalling and it's
infuriating, and we're going to put a stop to it. And that's why today,
I want to announce a couple of tough new efforts to protect seniors.
At my direction, Secretary Sebelius and Attorney
General Holder have expanded efforts across the country to vigorously
crack down on criminals who seek to take advantage of seniors and of
taxpayer dollars. We've established a joint Health Care Fraud Prevention
and Enforcement Action Team, also known as HEAT. (Laughter.) Yeah, you
like that -- HEAT. (Applause.)
This task force is already focusing on certain
cities with high rates of questionable Medicare expenses, and charged
several individuals with fraudulent billing. In addition, they'll
continue a series of summits in cities across America with high rates of
Medicare fraud, beginning next month in Miami. At these summits,
they'll work with state and local officials, health care providers, and
others that seniors rely on most, to increase awareness of fraud and
share information and expertise in identifying fraud.
And finally, we're going to reduce by half the
amount of waste, fraud and abuse in the Medicare system, protecting your
Medicare and the American taxpayer's money. In fact, we're looking to
eliminate waste everywhere we can. Earlier this morning, my budget
director Peter Orszag laid out our effort to cut wasteful spending
across government -- including asking all agencies to identify their
worst-performing programs as we put together the next federal budget.
So that's what this law does. Now, having said
that, there -- some of the folks who were against health reform in
Congress, they still think that none of this should have happened. They
don't think you should be getting these rebates, don't think we should
be closing this doughnut hole. In fact, you have an entire party out
there that's running on a platform of repeal.
They want to roll back all these reform efforts.
They say they have their own plan, but over the last 14 months of
debate, they never seriously advanced it. And when you look at it, you
can see why. They'd roll back the rebate to help you pay for your
medicine if you fall in the doughnut hole. They'd roll back the free
preventive care for Medicare recipients. And then away from seniors,
they'd roll back all the insurance provisions that make sure that
insurance companies aren't cheating folks who are paying their
premiums.
Their plan would let insurance companies continue
to deny folks coverage when they get sick. They'd do little to make
insurance more affordable. They'd gut the existing consumer
protections. They'd put insurance companies back in charge. Some have
even filed legislation that would end Medicare as we know it, giving
every senior a voucher for health care instead.
Now, I refuse to let that happen. We're not going
back. We are going to move forward. That's why I was elected.
(Applause.)
So, all told, the Affordable Care Act is a law that
keeps America's promise to our seniors. And it extends that promise to
your children and your grandchildren and your great-grandchildren,
because in recent years, we've arrived at one of those moments where we
needed to make right a longstanding wrong.
Millions of middle-class Americans watched our
employer-based health care system fray along the edges, leave a lot of
people out. A lot of people didn't have Medicare or qualify for
Medicaid. They fell into terrible situations. And we decided we were
going to stand up, as we've done so many times before, to make sure that
everybody got a fair shot. And we're a better nation for it.
Once this reform is fully in effect, middle-class
families are going to pay less for their health care. Taxpayers won't
have to pay higher premiums for trips to the ER by uninsured Americans.
Businesses are going to get help with their health care costs -- in
fact, small businesses are already learning they're eligible for tax
credits to cover their workers this year. And the worst practices of
the insurance company will end, so that they can't deny you coverage
because you got a preexisting condition, or because you happen to get
sick and suddenly they decide it's not convenient to cover you. So this
law looks out for future generations by doing more to bring down our
long-term deficits than just about anything that we could do.
And in the end, this debate was about whether we're
still a nation that keeps its promises to our seniors, and gives all of
our citizens -- not just some of them, but all of them -- a chance to
reach their dreams. It was about whether we're still a people that are
able to meet big challenges. And I'm proud to say that the answer to
each of those questions was yes. And as long as I'm President and I've
got great allies like the members of Congress who are here, then this is
going to be a promise that America continues to keep.
So thank you very much, everybody.
Question and Answer Session
And now I want to take some of your questions.
(Applause.) Let me make sure my mic is working. (Laughter.) Okay.
Secretary Sebelius is going to be like Oprah -- she's going to run the
show here. (Laughter.)
SECRETARY SEBELIUS: But I can't give away
cars, I'm afraid. (Laughter.) So as I told you before, we have lots of
people listening from around the country, and a number in here I know
who want to ask questions. So we'll take the first question from the
audience.
Yes, ma'am. And if you would say your name
and then ask your question to the President.
Q Good morning, Mr. President.
THE PRESIDENT: Good morning.
Q I just joined --
SECRETARY SEBELIUS: Can you tell us your
name?
Q Yes, I can do that. (Laughter.) Mary
Kay Crangel, (phonetic) and I live in Arlington, Virginia. I just
became eligible for Medicaid four weeks ago, and I've joined the
program. My question is about --
THE PRESIDENT: For Medicare or Medicaid? I
want to make sure -- Medicare?
Q Medicare. Did I say Medicaid? Oh,
sorry.
THE PRESIDENT: That's okay. (Laughter.)
Q Medicare. My question is about the
doughnut hole. I think all of us appreciate the $250, and I think that
will help a lot of folks. But my concern is that it's taking so long --
why 10 years to close the hole completely?
THE PRESIDENT: Well, here's what happening.
Essentially, we're going to be phasing this down. And I'll be honest
with you, it's just a matter of money. It's very expensive to close
this doughnut hole. When the prescription drug plan was originally
passed -- frankly, we shouldn't have had a doughnut hole in the first
place, but once that hole was created, then each year the budget was
assuming that doughnut hole was there. For us to close that right away
would have blown a hole through the budget.
So essentially what we said is, how do we
provide some immediate assistance to seniors who are falling into the
doughnut hole, and then how do we ratchet down the cost to seniors each
year so that by the time we get to 2020, the doughnut hole is completely
eliminated?
In the meantime, though, as I said -- I want
everybody to be clear here -- you will immediately benefit first from
the $250 check that you receive. Next year we then phase in 50 percent
discount on the prescription drugs that you're paying. And each
subsequent year what you're going to be seeing is, is that the costs are
going to be continually reduced.
Now, part of what we still have to do is we
still have to work with the drug companies to reduce just the cost of
prescription drugs generally. And this is something that Secretary
Sebelius takes very seriously. Are there ways that, for example, we can
get generics on the market quicker? Are there ways that we can make
sure that the patent laws don't prevent new products from getting to the
market the way they should? Are there ways that we can do a better job
negotiating for better prices? So there are going to be a whole host of
things that we're going to be doing. It's not like we're going to be
standing still during this 10 years. But what this law does is it
guarantees that help and makes sure that a decade from now it's going to
be completely eliminated.
SECRETARY SEBELIUS: Thank you, Mr.
President. My understanding is we have folks standing by around the
country. So the next question will come from the audience.
OPERATOR: Thank you. Your first call is from
Barbara Franklin from Rantoul, Illinois. Barbara, please ask your
question.
THE PRESIDENT: It's like magic.
(Laughter.)
Q Mr. President, my name is Barbara
Franklin. I'm President of the Illinois Alliance for Retired
Americans. My question is, will the reduction and subsidies to Medicare
Advantage plans cause these companies to reduce coverage to senior
plans?
THE PRESIDENT: Well, it's a great question.
Where are you calling from in Illinois?
Q Rantoul, Illinois.
THE PRESIDENT: Rantoul is a great town.
(Laughter.)
Q Yes. (Laughter.)
THE PRESIDENT: Tell everybody back home I
said hi.
Q I sure will.
THE PRESIDENT: This has been an area where
probably there's been the most misinformation and concern, after the
death panels. Remember those?
For those who are not familiar with it -- and
I want to make sure that I explain this as clearly as possible --
Medicare provides a guaranteed benefit. And then a while back a law was
passed saying we're going to have a program called Medicare Advantage in
which we pay insurance companies to provide Medicare benefits. So the
insurance companies are supposed to manage these Medicare benefits.
There are examples of where Medicare Advantage
has been a good deal for some seniors. But, overall, what happened to
the program is, is that insurance companies were getting paid on average
$1,000 more -- $1,000 more -- than the costs of regular Medicare. Okay?
Now, by law these insurance companies were
supposed to be providing additional benefits and better services for
this $1,000. But a lot of it ended up going to their profits and CEO
bonuses and their bottom lines. What's more was you -- if you weren't
signed up for Medicare Advantage -- were still paying higher premiums
for somebody else's Medicare Advantage. If you're in regular Medicare,
which is about 77 percent -- so three out of four of you who are in
Medicare are signed up for regular Medicare, and one out of four of you
are signed for Medicare Advantage -- those of you who aren't in Medicare
Advantage, you're actually paying a higher premium for that extra $1,000
going to the insurance companies.
Well, that doesn't seem like a good deal.
That doesn't seem fair. So here's what we did under the law. What we
said was, you can maintain Medicare Advantage, but we are going to say
to the insurance companies that you can't use this just to pad your
profits or to pay higher CEO bonuses. Eighty-five percent of what you
spend has to actually be for health services. We're going to review the
rates that are applied. We're going to set a rate that is fair and
appropriate so that Medicare Advantage isn't costing people who aren't
in Medicare Advantage.
So those are the changes that we've made.
Now, that is, by the way, where we are obtaining a number of the savings
in Medicare. It's by eliminating some of these insurance subsidies that
were unnecessary for the program. But we have not eliminated Medicare
Advantage, and insurance companies can still make money operating a
well-managed Medicare Advantage program that helps to manage and
coordinate the prescription drugs and the dental and all that stuff. So
for administrative convenience, Medicare Advantage may still end up
being a useful program for some people. We just want to make sure that
that money is not just a big giveaway to the insurance companies.
And this was costing Medicare overall I think
around $17 billion to $18 billion every year. That's billion with a B
-- right? So part of the way that we pay for the improved benefits and
doughnut hole is to say we're going to take some of that money from the
insurance companies -- and they'll still be able to make money. And
they're -- so seniors who are under a Medicare Advantage plan that is
doing a good job have nothing to worry about. If you're signed up for a
Medicare Advantage program that is wasting money, then we're going to be
just telling those insurance companies you got to stop wasting the
money. And that I think is something that everybody expects us to do as
overseeing a program so that it lasts over the long term.
Anything you want to add there, Kathleen?
SECRETARY SEBELIUS: I think the President did
a great job answering that question. Is there -- let's take the next
one from the audience. Sir, in the back.
Q My name is Pat Connover (phonetic),
I'm 69 years old, and I have heart disease, high blood pressure, and
incurable fast-growing prostate cancer. I have a couple of other
chronic conditions and special concerns as a transgender person. And in
addition, I'm allergic to some of the drugs that would most be used to
treat my conditions.
I'm actually doing the wise things for
myself and I'm still productive in several ways. One of the big reasons
for my sustained good health is my primary care physician, Dr. Gail
Povard (phonetic). In addition to being a good doctor, she is an
outstanding advocate in coordinating for my sometimes complex care.
I believe significantly more money can be
saved in Medicare by directing more resources to primary physicians for
coordination and patient advocacy, and less to the complex
organizational programs that have the same purpose. Instead of buying
expensive football teams, what we need is more archers. (Laughter.)
THE PRESIDENT: Well, let me -- I'm not going
to comment on football because -- (laughter) -- are most people around
here Ravens fans or Redskins?
AUDIENCE MEMBER: Redskins!
AUDIENCE MEMBER: Ravens! (Laughter.)
THE PRESIDENT: I mean, I'm just not -- I just
want to make sure. (Laughter.) You know, I don't know. See, this is
why I didn't want to talk about football. (Laughter.) And we got a
Navy person here, right here. (Laughter.)
This issue of primary care physicians is
absolutely critical. And it has the promise of making such a big
difference in the overall health of everybody, from children to
seniors. It used to be that most of us had a family doctor; you would
consult with that family doctor; they knew your history, they knew your
family, they knew your children, they helped deliver babies. And as a
consequence, what happened was, is that everybody got regular checkups
and could anticipate a lot of the problems that are out there.
Now, in these big medical systems, so often
what happens is, is that you're shuttled around from specialist to
specialist; oftentimes people don't have a primary care physician that
they're comfortable with so they don't get regular checkups, they don't
get regular consultations, preventable diseases end up being missed; and
you don't have the kind of coordination that's necessary between all
these different specialists, right?
So you go to one doctor; they take a test.
Then you go to the hospital; they have you take the same test. A lot of
errors occur because there's not communications between these various
specialists, and it adds a lot of cost because each time that test is
being taken, they're charging Medicare if you're on Medicare, and if
you're not on Medicare they're charging the insurance company. And that
is part of what is adding to all these costs.
So what we've been trying to do -- and this
was a major focus of the health reform bill -- is, how do we get more
primary physicians, number one; and number two, how do we give them more
power so that they are the hub around which a patient-centered medical
system exists, right?
And the first step is getting more primary
care physicians. I mean, sadly, a lot of young medical students, they'd
love to go into primary care, but primary care physicians don't get paid
as well as specialists. So they say to themselves, you know what, I
don't want to -- I've got all these medical school bills that I've got
to pay, I've got to become a plastic surgeon or something. And so part
of the bill was to, through loan forgiveness programs and other
mechanisms, make it more enticing for young medical students to go into
primary care, build up the pool of primary care physicians.
Number two is increasing the reimbursements
for primary care. Right now you've got a situation where if a primary
care physician says to a patient, you know what, you need to lose some
weight because you're at risk of diabetes, and I've got a good exercise
program that makes sense and here's a dietician that you should talk to,
sometimes Medicare may not reimburse that consultation. But they'll
reimburse the $30,000 foot amputation because -- after somebody gets the
disease.
Well, that doesn't make sense. So changing
our reimbursement system to encourage preventive care and encourage what
primary care physicians do is probably going to be the single most
important thing that we can do to assure that you and those of you who
have good primary care physicians continue to get that kind of care.
Last point I'll make, and I just want to go
back to this point that I made during my remarks, about a decade ago I
guess -- and Barbara, correct me if I'm getting the timing wrong -- but
about a decade ago, Congress -- not our Congress but a previous Congress
-- (laughter) -- made the decision that the way we were going to
actually cut Medicare -- or cut the rising costs of Medicare was to say
to doctors and providers, we're going to cap you at a certain level, and
if you don't, tough luck.
And in theory it sounded good, but it wasn't
very well thought through. And so what happened was, each year, costs
for doctors went up and the reimbursements didn't. And eventually it
got so bad that Congress then started saying, you know what, this isn't
realistic, so each year they'd kind of do a patchwork fix on this
thing. And the formula for reimbursing Medicare doctors would be
adjusted, but it would only be adjusted for a year or adjusted for two
years. But it wouldn't get adjusted permanently.
And what's happened is, over time, it's built
up so that now each year you end up having this emergency where unless
Congress passes a bill right away, suddenly Medicare doctors are going
to get a 21 percent cut in their reimbursements because all that health
care inflation had built up over time. Well, we're now in this
situation again. And we've got to fix this permanently.
Now, in the meantime, temporarily, we got to
make sure that your doctor is getting reimbursed so that they can stay
in business and keep their doors open. And my administration has worked
very closely with doctors to try to see if we can get this fixed short
term, but ultimately we're going to have to get it fixed long term.
What we want is a system where doctors are
reimbursed for the right things -- we want them reimbursed for quality,
we want them reimbursed for how good care you're giving patients. We
don't want doctors just to be reimbursed for how many tests they do or
how many procedures they do because sometimes that may mean that they're
not giving the best care. We want quality, not quantity.
So there are adjustments we need to make over
the long term in how we reimburse doctors. But what we shouldn't do is
have this guillotine hanging over their heads every year where they're
having to figure out, am I am going to get reimbursed or is suddenly my
income going to drop by 20 percent? Because what will happen is, more
and more people will say, I don't want to be a Medicare doctor, I don't
want to be a primary care physician for somebody on Medicare, because
it's going to make my income unstable. That's something that we've got
to fix.
Okay.
SECRETARY SEBELIUS: Thank you, Mr.
President. Before we take the next question from the operator, I just
want to add one thing to that great answer, which is to tell you that
the President has been focused from the beginning of the discussion
about health reform on the workforce, understanding that it's great to
say everybody should get great medical care, we'll have more access. He
said over and over again, what about the docs? What about the nurses?
What about the nurse practitioners? What if we don't have enough
people, how are we going to deal with this?
So really starting in the Recovery Act, the
first or second piece of legislation that was signed, thanks to members
of Congress and the President, there was the beginning of more
scholarships, more incentives for a whole range of health care
practitioners that really got increased in the Affordable Care Act that
was just signed. It's in the budgets in the future, it's going to be
continued, but I want to thank you, Mr. President, because as the
discussion went on in Congress, it often didn't get enough attention,
but I can tell you, because I had the privilege of seeing the President
on a very regular basis during this discussion, that that was constantly
a focus of his.
We have to make sure we have not only the
doctors and nurses and nurse practitioners, but the primary care, the
gerontologists, the folks who are going to take care of the entire
population. And that's been a focus, and I think it will continue to be
a focus.
Operator, if you are still there -- it's hard
because we can't see, so I assume you're still there -- is there another
question from the audience listening in?
OPERATOR: Your next call is from Barbara Call
(phonetic) from Denver, Colorado. Barbara, please ask your question.
Q Mr. President, this is Barbara Call.
THE PRESIDENT: How are you?
Q I'm a participant of (inaudible). I
would like to have you answer a question.
THE PRESIDENT: I'm all ready.
Q Okay. For leading health care reform,
I am concerned about how any health care changes will impact seniors and
choice around alternatives to having to go live in a nursing home. My
friends and I want to live independently.
THE PRESIDENT: Well, it is a great question,
and let me just say you sound like a woman after my grandmother's heart
-- (laughter) -- because she -- some of you know my grandmother passed
away a couple years ago. She helped raise me, so I was very close to
her. And she lived in Hawaii, and after my grandfather passed away, she
had the same little apartment she had had when I had been growing up
over there. And we kept on trying to say, you know, listen, why don't
you move to Chicago? And she said, what am I, an idiot -- (laughter) --
that I am going to trade 80 degrees and trade winds for Chicago
winter?
But she was always very proud and insistent.
And until the end of her life, she insisted on making sure that she
could live in her apartment. And there are all kinds of different
options for different people. The key is we want to give choice to
seniors, what's best for them. Some people love living in a retirement
facility. Some people want to stay in their own house. Some people
want a mix of options and so if they can get some help that comes in,
that may be the best option.
And what we try to do, not just in this law, but
what we're trying to do generally -- and I want Secretary Sebelius to
fill in some of the specifics on this -- is to increase the number of
options that are available for people and make sure that we are
reimbursing through Medicare not just for the traditional choices of, if
you're in a nursing home, then you're going to do it one way or another
-- but are there other ways that people can get maybe a nurse who comes
in, or maybe somebody who's cleaning an apartment for -- once a week.
That's what my grandmother did, for example. And it made all the
difference because she couldn't always reach to some of the places --
Barbara is all nodding. She can relate to that. (Laughter.)
So those are the kinds of innovations and
flexibility that we want to introduce into the system. Some of this
will be facilitated by the new law; some of it will be facilitated by
the ongoing improvements that we want to institute over the next several
years, so it's not going to happen all at once.
But -- go ahead.
SECRETARY SEBELIUS: Thank you, Mr. President. I
think there are a couple of -- let me just mention just a couple of
specific things that are part of the new law. One is there is a
provision called the CLASS Act, which is going to allow workers in the
current workforce to begin to voluntarily decide to have a payroll
check-off and put aside some money that they can draw on later to
provide the kind of residential care that I think is being talked
about. So if somebody needs to come to the house and help with lunch,
or give a bath, or go to the grocery store, those kinds of features. So
you'd have your own savings account to be able to draw on that. And
that will be managed as part of the law and I think allow a lot of
people to have more choices.
Just yesterday or the day before, under the
Department of Aging, we released grants to the communities which are
going to help governors like Governor O'Malley and his senior volunteer
program get the word out to families about what their options are. For
a lot of people, particularly if something happens quickly, somebody
suddenly gets much sicker than they were and needs help, a lot of
families don't know what their options are, don't know if there's
anything other than a nursing home available. And so part of choice is
knowing what are -- what is here in Maryland, what's around the country,
what are those options. So these will be counselors who will be able to
meet with families, meet with family members and talk about where the
options are.
There are also a whole series of medical
strategies in the bill that provide for wrap-around care once a patient
leaves a hospital, so a home health team, where somebody may need some
follow-up. They don't really need to be in a full-time residential
care, but they need somebody to follow up. You know, did you fill your
medicines? Are you having any problems? Did you -- are you
experiencing any trouble? So the bill also has a whole lot of features
that I think will make the kind of choices much easier for people.
And finally the Caregiver Act, there is a
program now, which is part of the overall President and Vice President's
move moving forward, which will provide for benefits for family members
who are helping to provide for care services, because sometimes, in this
tough budget time, it's tough. People are running out of money, and
they think, I want to help my loved one stay at home, I want to provide
the care, but I'm trying to raise kids and take care of an aging parent
or aunt and uncle; I don't have the resources, or I need a day off, or I
need some help going to the grocery store. So there is going to be some
caregiver money, knowing that about 80 percent of long-term care
services are really provided in communities by loved ones right now and
they just need a little help.
So the system is going to get stronger to give
those choices across the board. And I think all of that is good news
for Americans.
THE PRESIDENT: Good.
SECRETARY SEBELIUS: Yes, sir. And, again, if
you would say your name, that would be great.
Q I'm Ben Williamowski (phonetic). I'm a
senior citizen who lives in Maryland -- Silver Spring, Maryland. And I
want to thank --
SECRETARY SEBELIUS: Nice to see you again,
Doctor. It's lovely to have you here.
Q Nice to see you. And I want to thank
Secretary Sebelius and the President for allowing me the opportunity to
be here and ask this question. And I'm asking it more on behalf of my
children, who are in their late 50s and 60s, and my grandchildren and my
great-grandchildren. But I have heard from some of my friends who are --
who spread the myths, who are against the health care bill no matter
what it says. Of course they were -- told me about the death panel, of
course, which is now dead. (Laughter.)
But the -- one of the things that they
bring up -- and I heard this same argument in 1965 -- that with
providing Medicare -- at this point, we may not be concerned with this
at our ages but our children may be -- that we will soon, with the
program the way it is, that Medicare and Social Security will soon run
out of money. Now, as I say, that concern is not so much for me at my
age but for my children and their children.
THE PRESIDENT: Well, it is a wonderful
question so let me talk just about the finances of the health care bill,
Medicare, and I'll throw in Social Security in there.
We have a genuine long-term problem. And I
can describe it very simply: We've got a population that's getting
older, so you're going to see a bulge in the number of people who are
using Medicare and Medicaid. More recipients, fewer workers to support
those programs. We've got more money going out and less money coming
in. And that's going to worsen over time.
Now, that has nothing to do with the health
care bill. That has to do with the fact that we've got an aging
population and health care inflation -- the cost of -- the additional
cost of health care each year is going up much faster than overall
inflation and how fast wages and taxes, et cetera are growing, right?
So you've got this gap between how much we're going to need for Medicare
and Social Security versus how much is actually coming into the
programs.
That has to be fixed. Now, one way to fix it
would be to just say we're just going to cut benefits. If there's going
to be a gap between how much Medicare is going to cost and how much we
actually have, we just say, you know what, each of you, we're going to
have to eliminate some benefits. You get less -- fewer prescription
drugs. You got to pay higher co-pays. You got to -- certain procedures
won't be covered, or maybe some people won't be covered. Or we'll raise
the eligibility when you qualify for Medicare. I mean, there are a
bunch of adjustments that could be made that essentially come down to
cutting benefits. That's one way of dealing with rising costs of
Medicare.
Another way, which we think is the smarter way, is
to say, where are we getting good value for our money; where are we not
getting good value for our money; how can we design Medicare so that
we're reducing the costs going -- that are skyrocketing, but people are
actually getting better care? Are there ways that we can do that?
For example, can we have one test instead of five
tests -- have that one test emailed to everybody so that Medicare is not
paying for five tests? Can we arrange so that because we've got a good
primary care physician, you make one visit to the doctor's office and
all the specialists come to that one office, as opposed to you having to
make five different visits? Are there ways in which we can use best
practices for certain diseases so that we're catching them sooner? It's
cheaper to care for than when you've really gotten sick.
So what we tried to do in this health care bill is
actually see how can we make the health care system as a whole smarter,
more efficient for everybody, including young people -- not just for
seniors, because obviously health starts -- the healthier you are when
you're younger, odds are the healthier you're going to be as you get
older. So are there ways that we can -- through preventive care, better
efficiencies, better management, make the health care system overall
more effective? Because if we can do that, then that starts controlling
the costs of Medicare and it won't go bankrupt as quick.
A lot of those changes are what we introduced
in our health care bill, okay? Now, in addition, the health care bill
overall, because of us eliminating some of those subsidies to insurance
companies that I mentioned, actually are going to save a billion -- a
trillion dollars out of our deficit over the long term. A trillion --
that's with a T. That's a lot of money.
So when you hear arguments out there that,
well, you know what, we couldn't afford this health care bill, folks who
are saying that, they didn't read the bill, because according to the
Congressional Budget Office, this will actually reduce the deficit,
reduce costs by making the system smarter, making it more efficient.
That in turn means that Medicare will be there longer.
Now, the one thing I want to say about both
Medicare and Medicaid, though, this health care bill alone doesn't solve
all our problems, and I don't want to over-advertise. The truth of the
matter is it's very hard to change a health care system that involves
millions of patients, tens of thousands of doctors, hospitals, all those
systems all across the country. Trying to manage that all from the top
is just too hard.
What we try to do is create new incentives,
find who's doing the best job treating what, advertise those best
practices so that other people start adapting them, and over time that
trickles throughout the system so that the system overall gets more
efficient. That's what we're trying to do, and that's going to take
some time. It's not going to happen overnight. It's going to happen
over the course of a decade, maybe two decades in some cases, before
we're actually going to be able to solve this problem overall.
But what I want you to tell those friends of
yours is that the long-term fiscal implications of Medicare -- the only
way to fix those are to -- what's called "bend the cost curve," make
health care more efficient.
The other alternative, which is often the one
that is presented by our Republican colleagues, is to essentially
voucherize the system. I mean, that's been the main proposal that
they've got that was presented during this debate in terms of saving
Medicare. And what that basically means is, you know what, we're going
to give you a set amount -- just hypothetically, we'll give you $5,000
-- you go buy your own health insurance on the private market instead of
getting Medicare.
But think about it. What happens? You get
$5,000 and it turns out the costs are $10,000. That comes out of your
pocket. And then the next year the costs are $12,000, and maybe they
gave you an adjustment on inflation adjustments, so now you get $5,500,
but the cost for the same quality care you're getting under Medicare is
$12,000.
I mean, there's an easy way to make it look
like you're solving the problem -- you just dump it on other people.
And what we're trying to do is actually solve the problem by making the
health care system more efficient. That's going to be harder but it's
fairer, it's more just, it's going to keep the commitment and the
promise of Medicare for years to come.
SECRETARY SEBELIUS: Thank you, Mr.
President. Operator, we have time for one more from the world out
there.
OPERATOR: Your next question comes from
Dennis Yurkas (phonetic) from Las Vegas, Nevada. Dennis, go ahead and
ask your question.
Q Mr. President --
THE PRESIDENT: Hi, Dennis.
Q How are you, sir?
THE PRESIDENT: Good.
Q I am a retiree who's a member of the
International Union of Painters and Allied Trades who is currently
drawing my health insurance from COBRA since the federal subsidy for
employer is in danger of being discontinued. And I have confirmed my
former employer will not offer COBRA if the subsidy is discontinued.
What am I supposed to do and how does the new health care law help me
now to get health care, especially since my wife is dealing with some
very serious health issues?
THE PRESIDENT: Dennis, can I just ask you the
-- so you don't yet qualify for Medicare. You're getting COBRA because
your employer is not -- you're not on the job right now, is that what's
going on?
Q Correct.
THE PRESIDENT: Okay. Well, here's what
happened is because of just this terrible recession that we had, we knew
that a lot of folks were going to be losing their jobs. I mean, when I
took office, 750,000 people per month were losing their jobs. We're
now, because of the Recovery Act, the great work that Congress did,
we're now gaining jobs again every month, but we have that 8-million-job
hole that was created because of the recession, and that's going to take
some time to fill. So you've got a lot of people like Dennis out there
-- people in construction, people in the trades -- a lot of folks who
were laid off who not only are struggling to pay their bills but they
were in danger of losing their health care because they got it through
the job.
Now, there's been a program around for a long
time called COBRA -- some of you know about it. The idea is that
you're, by law, allowed to keep your health insurance even if you lose
your job just by paying the premiums. Here's the catch, though: If the
premiums are $1,000 a month, you weren't paying those, now you've lost
your job so you've got even less money. A lot of people couldn't afford
COBRA.
So one of the most important things we did in
the Recovery Act -- and a lot of people don't realize this, but this was
hugely important to so many Americans, including Dennis, as you just
heard -- was through the Recovery Act we said that we are going to
subsidize 65 percent of the costs of what your premiums were so that you
can keep your health insurance even as you're looking for a job and
trying to get back on your feet. So if your premium for your family was
$1,000 a month, now it will only cost you $350 a month.
We have sustained that for a year and a half
now, and we think it's important to sustain it for at least another six
months because there's still a lot of folks who are out of work. The
economy is improving, but the unemployment rate is still high. This is
being debated in Congress right now.
And so, Dennis, the answer is what we need is
to make sure that Congress follows through on its commitment to go ahead
and maintain COBRA until people are working at a higher rate again.
Now, that's not a long-term solution to
Dennis's question, though. The problem is that for a lot of folks like
Dennis, once COBRA ran out, before this crisis and before the Recovery
Act, they were just out of luck. If you didn't have a job you didn't
have health insurance, because buying health insurance in the private
marketplace as an individual is prohibitively expensive. If you don't
-- if you're not part of a big pool that can negotiate with the
insurance companies, they jack up your rates; you're paying 20 percent
more or 30 percent more that you would paying if you were working for a
big company.
In some cases, if you've got a preexisting
condition, you just can't get health insurance at all. Some of you have
been through this. Some of you, if you haven't yet qualified for
Medicare, are going through it right now. There are a lot of early
retirees who aren't yet qualified for Medicare but they've lost their
job; they've got enough savings to support themselves, but they don't
have enough savings to be paying these huge medical bills.
So the whole idea behind the health reform
bill was let's put you in a pool so you get the same leverage that
somebody else does. Let's -- even if you're on your own, or you're a
small business owner, let's give you the same negotiating power that
somebody who works at Google has. So -- or another example, if you're a
federal worker, you're part of a pool -- and you get a great deal.
So the way the health care bill is structured is
this: If somebody like Dennis -- even after COBRA is -- he's no longer
eligible for COBRA, somebody like Dennis could sign up to be part of a
pool where they got the best, lowest rates possible. Kathleen Sebelius,
as Secretary of Health and Human Services, would be overseeing what
these policies were that were offered. You'd have a choice of plans.
It wouldn't be one size fits all. If you were -- had -- if Dennis had a
bigger family and he had -- he mentioned his wife, so he wanted to have
a certain kind of better insurance, he could pay a little bit more. If
he was young and single and feeling healthy, he could have a cheaper
version. But the point is, he'd get the benefit of being part of this
big pool. That's the main concept behind this health care reform bill.
If you still couldn't afford it -- and there's
some people who -- they're making minimum wage, they're not making a lot
of money -- they still couldn't afford the premium even though it's a
much better deal than what they could get on their own, then we're going
to provide tax credits, provide subsidies, to help people pay for their
insurance.
Now, all of this doesn't go into effect until
2013. And I'll anticipate the question earlier -- how come it's taking
so long? (Laughter.) In this case, it's not just a question of money,
it's also a question of just setting it up right. I mean, we're talking
about 30 million people suddenly getting insurance. That -- you've got
to set it up in a way that is efficient, isn't subject to fraud. So we
had to phase that in to do it right over a certain number of years.
But the key is, by 2014, which is right around
the corner, what you're going to see is a situation where somebody like
Dennis, even if his COBRA eligibility has lapsed, he's going to know,
have the confidence, have the security, that he can look after himself
and his wife when it comes to their health care needs.
And that is something that has existed in
every other industrialized country in the world except the United States
-- up until this year. Think about that. We're the wealthiest nation
of Earth. Every other country had that basic security except us.
And what we did was, we didn't do anything
radical. We didn't -- contrary to our critics, this wasn't socialized
medicine. We built off the private employer-based system that we
already had. But we said, you know what, we're going to fill these gaps
so that everybody has some security; so that you have no parent out
there who's thinking, I'm not sure I can afford to take my child to a
doctor even though she's not feeling well; there's nobody out there who
they lose their job at 55 and suddenly are thinking, you know what, for
10 years I've got to go without health insurance; there's nobody out
there who, because they had a preexisting condition -- if somebody like
Fran, who had been stricken with breast cancer, who right now, if Fran
was working rather than retired and tried to get insurance right now,
she might be prohibited. She might not be able to get health
insurance.
Well, that's just not -- that's not right.
It's not reflective of the values of our country. That's why we changed
it. And that's why we are going to fight any effort to go back to a
system that doesn't work for the American people and doesn't work for
our seniors.
Thank you so much, everybody. God bless you.
(Applause.)
SECRETARY SEBELIUS: Thank you, Mr. President.
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