President Obama health care reform town hall in Grand Junction, Colorado pt 7

August 17, 2:06 PMUS Headlines ExaminerCharisse Van Horn

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All right, I'm going to call on this gentleman because he's been waving -- and he's shouted at me a couple of times, so I just want to -- I just want proof here that I'm happy to get a good debate going.
Q    How are you doing, Mr. President?

THE PRESIDENT:  I'm good.  What's your name?

Q    My name is Zack Lane (phonetic).  I'm a student at the University of Colorado in Boulder.

THE PRESIDENT:  Good to talk to you, Zack.  What do you study?

Q    Political science and business marketing.

THE PRESIDENT:  Fantastic.  All right, what's your question?

Q    My question is this.  And also, I'd love to have a debate, just all out, anytime, Oxford-style, if you'd like.  (Laughter.)  I understand -- I'm willing to do that.  But my question is this.  We all know the best way to reduce prices in this economy is to increase competition.  How in the world can a private corporation providing insurance compete with an entity that does not have to worry about making a profit, does not have to pay local property taxes -- (applause) -- they do not have to -- they're not subject to local regulations?  How can a company compete with that?  And I'm not looking for anything -- I don't want generalities.  I don't want philosophical arguments.  I'm just asking a question.

THE PRESIDENT:  That's a great question.  Thank you for the question.  (Applause.)

Now, I just want to point out that I partially answered the question earlier by explaining that certainly they can't compete if the taxpayer is standing behind the public option just shoveling more and more money at it, right?  That's certainly not fair.  And so I've already said I would not be in favor of a public option of that sort because that would just mean more expenses out of our pockets and we wouldn't be seeing much improvement in quality.

It is true that there are certain costs associated with a private business that a government would not have to worry about; you mentioned a couple of them.  It's not just, by the way, property taxes; it's also things like just the cost of capital.  In terms of the cost of borrowing, a public option -- insurance companies have to have a lot of money on hand and it's conceivable that a private entity that's having to pay a certain interest rate for their money would be really undermined if the government is able to get money much cheaper implicitly because Uncle Sam backs this operation.

So that's why I say, this is actually a legitimate debate.  I think that we can craft a system in which you've got a public option that has to operate independently, not subsidized by taxpayers -- it would be nonprofit, but we've already got nonprofits out there like BlueCross BlueShield -- that they would have to go on the market and get a market price for capital, so they wouldn't be able to just have the Federal Reserve write them a check.  I think there are ways that we can address those competitive issues.  And you're absolutely right, if they're not entirely addressed, then that raises a set of legitimate problems.

But the only point I wanted to make was the notion that somehow just by having a public option you have the entire private marketplace destroyed is just not borne out by the facts.  And in fact, right now you've got a lot of private companies who do very well competing against the government.  UPS and FedEx are doing a lot better than the post office.  (Applause.)  No, they are.  And so -- but the larger point I want to make -- and it's good to see a young person who's very engaged and confident challenging the President to a Oxford-style debate, I think this is good.  (Applause.)  You know, the -- this is good.  You know, I like that.  You got to have a little chutzpah, you know.

This is a legitimate debate to have.  All I'm saying is, though, that the public option, whether we have it or we don't have it, is not the entirety of health care reform.  This is just one sliver of it, one aspect of it.  And by the way, it's both the right and the left that have become so fixated on this that they forget everything else, like the fact that we can help Nathan make sure that he doesn't suddenly find himself -- (applause) -- completely broke in trying to treat his son.

So we are working on a series of proposals to address the questions that you're raising.  I believe that we can work them out.  But those are specific questions as opposed to broad, philosophical questions about whether government ever has a role to play or not.

Keep in mind, finally -- and this is the last point that I'll make -- that you have a bunch of countries that have systems in which government is involved but you still have a thriving private insurance market -- The Netherlands being a good example.  Everybody is covered.  Everybody has care.  The government has regulations in there.  But it does not somehow take over the entire private insurance market.  So I just want people to understand nobody is talking about a government takeover of health care.  I want to repeat that one last time.

All right.  I've got -- I've got one last -- I've got time for one last question.  I'm going to call on this young lady right here.  Oops, she just lost her question.  Go ahead.  Who's got a microphone?  Right here, right here.

Q    I cannot believe that we have the President of the United States of America in Grand Junction, Colorado!  (Applause.)

THE PRESIDENT:  Good to be here.

Q    We are so proud of you.

THE PRESIDENT:  Thank you.  (Applause.)

Q    My name is Marie Elena, and I live in the Western Slope in Montrose, Colorado.  And I am a naturalized citizen, and I am proud to be an American in this beautiful land.  (Applause.)

THE PRESIDENT:  Thank you.

Q    As a child I had polio, and I had a series of surgeries, 52 of them, to correct my poor structure of bones -- between here, Denver, Montrose, and the Mayo Clinic in Phoenix, Arizona.  I have been blessed with a good insurance, generally excellent doctors and care.  However, my major concern in cost, even with good -- even with a good insurance, the cost has been high, practically when I have been gone out of the network.  Why should our doctor treatment choice be limited by a geographic area or the state?  What kind of competition is this, Mr. President?  (Applause.)

THE PRESIDENT:  Okay, all right.

Q    Thank you.

THE PRESIDENT:  This raises an important question, because it goes to the overall debate that's taking place out there right now.  When we talk about reform, you hear some opponents of reform saying that somehow we are trying to ration care, or restrict the doctors that you can see, or you name it.  Well, that's what's going on right now.  It's just that the decisions are being made by the insurance companies.

Now, in fairness, we probably could not construct a system in which you could see any doctor anywhere in the world anytime, regardless of expense.  That would be a hard system to set up.  So if you live in Maine, you know, we're going to fly you into California, put you up.  I mean, you can see -- and I'm not trying to make light of it -- you can just see the difficulty.

So any system we design, there are going to have to be some choices that have to be made in terms of where you go to see your doctor, what's going on, et cetera.  That's being done currently in the private marketplace.

All we're trying to do is to make sure that those decisions that are being made in the private marketplace aren't discriminating against people because they're already sick; that they are making sure that people get a good deal from the health care dollars that they are spending.

So let's make sure, for example, that if you go to a hospital, you get one of those operations that you discussed, and it turns out that two weeks later you've got to be readmitted because they didn't do it right the first time, that the hospital has to pay some penalty for that, or at least they're not being reimbursed as much as a hospital who gets it right the first time.  That's an example of changing incentives that can save us money.

The more that we make those kinds of changes that improve quality, reduce cost, the more likely it is that more Americans have more options and that they are not being jerked around.  It doesn't mean that everything is going to be perfect, but it does mean that consumers will have more choices, better options, more security, more protection.

That's all we're trying to accomplish here and we're trying to do it in a way that over time reduces costs overall for families, whether you're getting Medicare or you're getting Medicaid or you've got private insurance through your employer or you're a small business owner.  That's what we're trying to accomplish.

And I am confident that we can accomplish it -- but we're going to have to work hard to do it, and we're going to have to overcome some of the wrong information, and we're going to have to have an honest debate.  Nothing is going to be perfect.  We're going to have to make sure -- this is something, by the way, that people need to understand:  Even if everything goes perfectly and we pass legislation, let's say, in October, we're still going to have another three months of debate about this, then we're still going to have several years of implementation.  It's not going to happen overnight.  We're going to have to set up these reforms and these processes, and we're going to have to give insurance companies the chance to adjust, because, for example, if we don't have everybody covered, we can't construct a system that prevents insurance companies from discriminating against preexisting conditions.  I hope everybody understands that.

We can't tell insurance to take everybody if, on the other hand, you've got a whole bunch of people who are healthy and young who choose not to get insurance at all, because what ends up happening is then insurance companies are just going to take the people when they get sick.  Somebody won't buy insurance until they find out that they're sick.  Then they go into the insurance office and they say, give me insurance so I can go pay my bill.  Insurance companies would lose money pretty quick that way.

So if we're going to eliminate the preexisting conditions problem, we've got to also -- have the coverage problem, and that's why this is going to have to be phased in over a number of years.

Last point I want to make, and this has to do with the budget issues, because we've got a huge deficit right now and a huge debt, and I think that that's coloring how people view the debate.  I hear a lot of people say, how can we afford this right now?  We've got to reduce our deficit.

First, I want everybody to understand the source of our deficit, because if you don't understand that, then my argument won't make sense.  When I walked into the White House, I had gift-wrapped, waiting for me at the door a $1.3 trillion deficit -- $1.3 trillion.  Now, I say that -- (applause) -- I just want to -- I just want to -- I just want to -- I say that -- this was not -- and this is not, by the way, entirely the previous administration's fault.  The financial crisis was so bad that revenues plummeted and all this money was spent in making sure that the banking system did not completely collapse.  So all the actions that have been taken -- the bank bailout, the auto bailout, all that stuff -- that did spike the deficit.

But the problem actually is not that -- you know, the extraordinary steps that we've taken over these last one or two years.  The real problem is much longer.  Even if we had had no fiscal crisis whatsoever, we have a structural deficit.  We're spending more money than we are taking in.  We've been doing it for the last eight years.  When we passed the prescription drug benefit for Medicare, by a Republican Congress, they didn't pay for it.  They didn't want to raise taxes, but they wanted to get the benefit.  That just was red ink.  That just went into our structural deficit.

When we fought the Iraq war, we made that decision.  We didn't pay for it.  When we cut taxes on some of the wealthiest Americans, we did not compensate by making cuts in programs that were comparable.  So what that has all added up to is, we've got a structural deficit that over the course of the next 10 years is about $9 trillion.

Now, I say that because I just want everybody to understand, if we're going to tackle that problem, the only way we can do it in an intelligent way is if we get control of Medicare and Medicaid spending in some realistic way.  If we don't do that -- if we don't do that, we can't simply cut our way out of the problem or tax our way out of the problem.

I ask sometimes, when I'm in audiences, what people think the amount of federal budget is devoted to foreign aid.  And people will say, 25 percent; if we could just cut that out, we could eliminate the deficit.  Foreign aid is 1 percent of our budget -- 1 percent.  People think, well, it's all these pork projects and earmarks that everybody is getting.  One percent.  Almost all of our spending is Social Security, Medicare, Medicaid, interest on the national debt, defense spending -- things that are very hard to cut.

Only about -- only about 30 percent of the overall budget, somewhere between 25 and 30 percent is non-defense discretionary spending.  That's everything for national parks, for education, you name it.  Every single program that you think of that you think of as a government program, that is only about 25 percent of the budget.  The rest of it is all Social Security, Medicare, and Medicaid.  And what's really going up fastest is Medicare and Medicaid.

So I just want everybody to understand, if you are a fiscal hawk, if you are -- if you are a deficit hawk and you are tired of this crazy spending in Washington and you want to finally make sure that we are looking out for the next generation, then you, more than anybody, should want to reform the health care system -- because if we don't do it, we can't solve that problem.  (Applause.)

Thank you, Grand Junction.  Love you.  (Applause.)

END 

5:10 P.M. MDT