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CNN LIVE EVENT/SPECIAL

Healthcare Summit

Aired February 25, 2010 - 11:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


WOLF BLITZER, CNN ANCHOR: The president is having debate right now with Lamar Alexander, the Republican senator from Tennessee, over whether or not the Democrats' plan would actually increase costs for consumers.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I think that it shows some promise. You mentioned that, you know, that Mike Enzi has previously said that he's interested in small businesses being able to pool in the equivalent of some sort of exchange. So that's where there's some overlap.

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

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

(UNKNOWN): Mr. President --

(CROSSTALK)

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

Go ahead.

SEN. LAMAR ALEXANDER (R-TN), CHAIRMAN, SENATE REPUBLICAN CONFERENCE: Mr. President, let me -- let me show some respect for my colleagues here. They're all here eager to speak, all sure they could do a better job than I could on any of these points.

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

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

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

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

Mitch, who would you like to talk about costs?

SEN. MITCH MCCONNELL (R-KY), SENATE MINORITY LEADER: Mr. President, since some liberties have been taken here, let me just make a quick observation. Then I'm going to call on Dr. Coburn to make our framing statement on the issue of cost containment.

One thing I think we need to be acutely aware of, ladies and gentlemen, we are here representing the American people. And Harry mentioned several polls. I think it is not irrelevant that the American people, if you average out of all of the polls, are opposed to this bill by 55-37. And we know from a USA Today-Gallup poll out this morning they're opposed to using the reconciliation device, the short-circuit approach that Lamar referred to that would end up with only bipartisan opposition, by 52-39.

Now, I'd like to call on Dr. Tom Coburn who's been a practicing physician for many years, to address the cost-containment issue.

SEN. TOM COBURN (R), OKLAHOMA: Thank you.

Well, Mr. President, thanks for having us do this. I think today's going to be enlightening.

The first thing I would do is put out a caution to us because what I see the Congress doing and what I saw this last year is us actually performing bad medicine. And that is that we get stuck in the idea of treating the symptom rather than treating the disease.

And whether you go to Harvard or whether you go to Thomson Reuters, here's -- there are some facts we know about health care in America. And the facts we know is one out of every three dollars that gets spent doesn't help anybody get well and doesn't prevent anybody from getting sick.

The second thing we know is, from the Congressional Research Service, that most of the mal-drivers (ph) today in health care come from government rules and regulations. The government now directs over 60 percent of the health care in this country. And if throwing money at it and creating new government programs could solve it, we wouldn't be sitting here today because we've done all that. It hadn't worked. So what I thought we ought to do is maybe talk about why does it cost so much, because the thing that keeps people from getting access to care in our country is cost.

You mentioned Malia and Sasha. The fact is, is with young kids going to the E.R., whether they have meningitis or asthma, they're going to get treated in this country. But they may get labeled with a preexisting illness after that. And that's another thing I'd be happy to talk about at a later time.

But the fact is, is we know how to treat acute asthma. What we don't do a good job of is preventing children from getting acute asthma. We don't do the good job of prevention.

So when you break down the costs, what we know is 33 percent of the costs in health care shouldn't be there.

And how do we go about doing that? And what are the components of that cost? And when you look at, when it's studied, if you look at what Malcolm Sparrow from Harvard says, he says 20 percent of the cost of federal government health care is fraud. That's his number.

If you look at Thomson Reuters, when they look at all of this, they say at least 15 percent of government-run health care is fraud.

Well, when you look at the total amount of health care that's government run, you know, you're talking $150 billion a year.

So tomorrow, if we got together and fixed fraud, we could cut health care 7.5 percent tomorrow for people in this country.

So what we ought to do is do the Willie Sutton thing. We ought to go for where the money is.

What's the other area? What we do know -- and I'm guilty of this, Dr. Barrasso's guilty of it, Dr. Boustany is guilty of it -- is a large portion of the tests we order every day aren't for patients. They're for doctors. And the reason they're there is because we are risk averse to the tort system and extortion system that's out there today in health care.

And there are a lot of ways to fix that. But I just went through last night, if you add up what Thomson Reuters, which looked at all the studies that have been done and combined them in, they say between $625 billion and $850 billion a year of health care dollars are wasted.

So it seems to me if cost is the number one thing that's keeping people from getting care, then the efforts of us, as we go after cost, ought to be to go to those areas where the cost is wasted.

And there's a philosophical difference in how we do that. One wants more government-centered approach to that. I would personally prefer a more patient-centered, market-orient approach to that. But nevertheless, there's where we can come together, just on those two areas, where we could cut costs 15 percent tomorrow. And that's for everybody in the country.

What would -- what would happen to access in this country if tomorrow everybody's health care costs went down 15 percent? Access would markedly increase.

So what I would hope we would do is that we would go back and concentrate on the areas that have the biggest pot of gold for us. And the biggest pot of gold is, is we don't incentivize prevention. We don't pay rewards for great management of chronic disease. We have a system throughout the country where we're encouraging lawsuits that aren't productive for the country, and what they actually do is cause the cost of health care to go through the roof.

We also know there's some other real things that we ought to address. There are conflict of interests within the medical field. There's nothing wrong with addressing those and taking those off (ph).

We know that we do not -- we absolutely do not incentivize prevention. And I'm not talking about creating walking paths. I'm talking about paying people who actually do a good job to do prevention.

Talking about changing the school lunch programs where it meets the needs, nutritional needs of Americans. Changing the food stamp program where it incentivize people to eat the right things, not the wrong things. We actually create more diabetes through the food stamp program and the school lunch program than probably any other thing, because we're not feeding a -- offering and incentivizing a great response.

So I think if -- I think it's great that we're coming together. But the gold is in where's the cost excesses? And what I would hope we would do is we would look at that and say, How do we come together and actually achieve a reduction in the extortion that goes on in this country in terms of medical malpractice? And there's lots of ways to do that without us mandating states to do that.

How do we do that in terms of creating an elimination of fraud?

You know, when you compare the private sector fraud rates, it's 1 percent compared to Medicare and Medicaid. You know, there's estimates that there's $15 billion worth of fraud in Medicaid a year in New York City alone.

So we haven't attacked that. We haven't gone where the money is. And my hope would be that we would look at where the money is. And if truly it's accurate -- and I don't know many people that will disagree that $1 in $3 doesn't help somebody get well and doesn't prevent it, then we ought to be going for that $1 in $3.

And we ought to do it by not creating a whole bunch of new government programs, but by creating an incentive to reward people. In your new bill you have good fraud programs, but you lack the biggest thing to do. The biggest thing on fraud is to have undercover patients so that people know we're checking on whether or not this is a legitimate bill. And you don't know who's an undercover patient and who's not. And all of a sudden you start changing your attitude of whether or not you're going to milk Medicare or you're going to milk Medicaid.

SEN. HARRY REID (D-NV), SENATE MAJORITY LEADER: Mr. President, if I could just say, I'm not an expert on much, but I am filibusters. And we've got 40 members of Congress here.

OBAMA: Tom, you made some powerful points. You want to just wrap up real quick?

COBURN: No, I'll just finish with that is $1 out of $3 not helping everybody, we ought to go for where it is.

OBAMA: Well, Tom, I appreciate what you said. I think we're going to have Steny Hoyer go next. I just want to make this quick point: Every good idea that we've heard about reducing fraud and abuse in the Medicare and Medicaid system, we've adopted in our legislation.

So that's an example of where we agree. We want to eliminate fraud and abuse within the government systems.

Let's recognize, though, that those savings in the government systems, which will help taxpayers and allow us to do more, doesn't account for the rising costs in the private marketplace.

Now, the private marketplace, you mentioned the issue of medical malpractice and, you know, frivolous lawsuits. And I -- as you indicated, these are areas where Secretary Sebelius has already begun to try to give states some incentives to do that.

On the prevention side, there's a whole host of provisions inside the legislation that's been passed by the House and Senate, and I think Steny will talk about it.

So we've identified some areas we agree on. And then the question just is does that help the average family in the individual market who potentially can get costs.

But, Steny, why don't you --

COBURN: Let me just respond to one thing. You get cost shifted every penny that gets wasted on Medicare.

OBAMA: Absolutely.

COBURN: And that gets cost shifted to the private sector. So if, in fact, we're wasting --

OBAMA: It would help.

COBURN: -- in the public sector, we're shifting it to the private sector.

OBAMA: You and I agree.

Steny?

REP. STENY H. HOYER (D-MD), MAJORITY LEADER: Mr. President, thank you very much.

A quote I will use is "we should have available and affordable health care to every American citizen, to every family."

BLITZER: All right. We're taking another quick break and continue our coverage of this historic summit at Blair House. A good, substantive debate already beginning. We expect a lot more right after this.

(COMMERCIAL BREAK)

BLITZER: Steny Hoyer, the House majority leader, the number two Democrat in the House, he's making his points right now.

HOYER: We agree with that. I think probably everyone around this table agrees to it. So what we're going to talk about is the how. Cost containment is clearly one of those issues that we need to deal with. Cost containment for that small business that is having a 67 percent increase. Cost containment for that woman who can't afford insurance but has a health care issue that she can't avoid. It's not optional for her. So we have to deal with that.

Many in my caucus believe that one way of doing that is to increase competition and have an open, free market that is transparent. I think all of us around this table agree that a free market does that -- an open market, a transparent market, where people could compare prices and compare what they're going to get.

And that's what we've tried to do in both these bills. We did it a little differently, but that's what we tried to do. We hope we can get agreement on doing that. An open, transparent market will bring down costs, we believe.

And, in addition to that, Senator Coburn, we certainly agree with you that $1 in $3 is not being spent as effectively as it should be. And we have a lot of provisions in both bills, as you well know, that try to get us to a place where administrative costs, health information technology, so many other things are done to wring the costs out.

And, in addition, you speak eloquently and correctly about wringing fraud, waste and abuse out of this system. I know you're happy to have seen in our bill -- in the House bill -- and in the Senate bill, very substantial investment in doing just what you suggest.

So I think we have agreement on conflict of interest in delivery of medicine as well. We've dealt that -- with that in our bill. We've dealt with it previously, as you well know.

We've put in incentives for prevention in here, which you mentioned. We absolutely agree on that. We think this bill does that. Now, you may have a better way of doing it, when you talk about how that better way is. But we certainly have addressed the issue of making sure that we have wellness as a focus, not sickness.

We have to deal with sickness, but what we really want is wellness. So we've worked very hard on that in this bill.

You mentioned the school lunch and food stamp programs. I'm sure we can get there, too, an agreement. We certainly agree with the premise you stated. We'll figure out the way and means to get there.

What have we done? We've stopped premium discrimination. That clearly ups cost. If you're in a small market, as the president pointed out, you're going to pay a higher price.

We don't do that. Why? Because we're in a big market. We have the competitive edge, and the insurance company doesn't have preexisting conditions for us. They just take us as a group.

That's what we're trying to get for every American. That they have access to a large group, whether they're an individual, this woman who has the tumor, or whether they're a small business, they can get into a large group. We're trying to do that.

We want to go after fraud, waste and abuse. I reiterate that. Transparent market. Stop premium discrimination. And make sure that people with a preexisting condition, as none of us have a problem with, but a lot of people do have, because we're in a big group, that are in a large group. And we prohibit that. You agree with that rhetorically. Now, it's not in your legislation, but you certainly agree with capping out-of-pocket expenses on an annual basis or a lifetime basis that you don't think that's right, that people ought to be continued to be covered.

We believe there needs to be better coordination of care. You're a doctor. You have a number of doctors in the room. We believe that there ought to be a way that we can incentivize the coordination of care.

We also believe that there should be incentives to provide care based upon best practices, not based upon simply procedures being reimbursed. I think we all agree on that. You're shaking your head in agreement. And I know we all agree on that. And, you're right, we have to get there.

But I would suggest to you that one of the things that many in my caucus felt very strongly about in terms of competition was having a public option. Now, there was real disagreement on that issue. But many in my caucus thought that would open up competition, would provide for access for every citizen, if they didn't have access in some other way.

Now, Senator Baucus is going to speak more specifically in terms of our cost containment, but doughnut hole certainly is one of the issues that we need to deal with. Doughnut hole, we deal with in our legislation in the House, and we would hope that it is in the legislation that we agree upon.

Because seniors are confronted with extraordinary out-of-pocket costs for a very significant portion of the cost of their prescription drugs. And seniors are concerned about that we take care of that in our bill.

But I think what the American public --

BLITZER: All right. Let's digest quickly what we have been hearing now. It's been going on for about an hour and 20 minutes or so, maybe an hour and 10.

Candy Crowley, some substantive debate going on. Senator Tom Coburn, a Republican of Oklahoma, a physician himself, he made some points that seemed to resonate with the president.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: They did, but the problem is going to be, as it was described to me by someone on Capitol Hill, that there is agreement. But in the end, sort of the knee bone is connected to the thigh bone, if you'll excuse the medical look at this, that you can't -- that if you're going to do one thing, you've got to figure out how to pay for it. If you're going to do something, that it's very difficult to say oh, we agree on these four things, let's pass that.

BLITZER: And that challenge from Lamar Alexander to the president, we're willing to talk, but you have to renounce that reconciliation option where you just go with 51 votes.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: An interesting and a very political choice by the Republican leadership. They chose a former governor, a guy who has run for president, but he's more folksy in his approach. He's not as well known and certainly not as polarizing nationally as the first Democratic Speaker from the Congress, the Speaker of the House, Nancy Pelosi. The Republicans made that choice, and then he made a direct challenge -- Mr. President, don't use any parliamentary gimmicks, don't do this as Democrats, try to work with us.

And you'll notice, Wolf, when the president had a chance to answer, he said let's talk about that later. Let's see first if we can talk around the table for a couple of hours and see if we agree. Then we'll decide the process, which the translation of that is, I reserve the right --

(CROSSTALK)

BLITZER: He was ready to renounce that reconciliation option.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Wolf, it struck me that President Obama came, as expected, masterful. He's very good at this. But I think what was unexpected is how robust the Republican response has been.

They have met him at his level and taken him on. And I think it's a pretty even score now in terms of the debating points. Lamar Alexander, animated, forceful. Tom Coburn, directly to the point. The other Democrats are sort of fading here. It's really President Obama now taking on the Republicans, and it's a fascinating conversation.

BLITZER: Some anecdotes from Harry Reid and Nancy Pelosi, but so far not really responding in substance.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: It's sort of same old, but what you're hearing is same old, same old from the Democratic side. The Republicans kind of shook things up a little bit by putting Lamar Alexander out there. I think that he's a folksy, different voice that people hear, and I think President Obama is really carrying the load here for the Democratic Party right now.

Not the -- not the Democratic leaders. They're so partisan. Obama seems much more reasonable when dealing with the Republicans.

BLITZER: And Lamar Alexander not only a former governor, but also a former president of the University of Tennessee. He knows his stuff. So does Tom Coburn.

JOE JOHNS, CNN CORRESPONDENT: He certainly does. And these are two guys who can go toe to toe with the president of the United States on this issue at any time.

But, look, you talk about the reconciliation process, which is one of the big things people want to discuss here. Simply going around the 60-vote procedure that the Senate has and moving to a 51- vote procedure, which a lot of people think is not a good idea, what they're doing here is holding this event to try to say that we had an open process, because they may actually have to go to that 51-vote procedure, which is very controversial. At the end of the day, the president will probably get his way on it.

BLITZER: All right. Let's take a quick break. We'll resume our coverage of the Blair House Health Care Summit. This is history unfolding right here, live on CNN.

And remember, you can always watch it on CNN.com as well.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

Senator Max Baucus, the chairman of the Finance Committee, he's making the point that Republicans and Democrats, in his opinion, they're not necessarily all that far apart on some of the key substantive issues.

SEN. MAX BAUCUS (D), MONTANA: In addition, you mentioned lawsuits. Secretary Sebelius is working to try and find ways to encourage states to settle, resolve issues before they become big, bad lawsuits.

After that, Lamar says we should find ways for states to be able to lower their costs. So we do that. We let states opt out. They can do what they want to do. And Senator Wyden also has a proposal. Senator Cantwell has a proposal. We give a lot of flexibility in that regard.

Expand HSAs. That's buy-in. There's nothing wrong with HSAs, but we also have to have products for poorer people, lower-income people. HSAs work pretty well if you middle or high income. Pre- existing conditions -- clearly, we all agree on that. We have those provisions in our bill.

Back to small business, we're not that far apart. Some suggest solicitation of health plans, where small-business people can band together in an association, pool, and get better insurance. That's -- that's fine.

What we provide for in our legislation is something similar. It's called the SHOP Act -- (INAUDIBLE), bipartisan, that worked on this. And basically it allows -- sets up a small-business arrangement and exchanges. Small business participates in their own exchange and gets the advantage of all the pooling. And then they can do what fellow employees do; they can shop and compare to get the best deal.

And I would guess that most small businessmen would like to do that.

I might add that we're also providing tax incentives, tax credits for businesses, small business that want to purchase health insurance for its employees. And it's pretty good. It's a 35 percent tax credit the first couple of years. Then, once the exchange is up, it's 50 percent.

So the main point is, we're not really that far apart. We're trying to find ways for small business to pool, small business to take advantage of competition, to shop and compare, and also some tax provisions that enable it to encourage businesses to get health insurance.

So I might say, too, that, if you look at all the provisions that Steny outlined, and (INAUDIBLE), we agree. We agree on prevention. There are major prevention provisions in our legislation, as -- as Senator Coburn mentioned.

We also agree on trying to change the way we reimburse docs. I think the biggest game-changer, here, frankly is how we reimburse our doctors, based more on quality, rather than quantity. I know -- I know Tom Coburn really agrees with that, as a doctor. Most doctors do.

And it's another example we really are close. And I think that once we keep pushing on those areas that we're close, it's going to make a difference.

The exchanges, as you mentioned, Mr. President, it's a Republican idea. It works. What I like about exchanges, it's like Orbitz. It's like Expedia. You know, you go to Orbitz or Expedia to buy an airline ticket, you compare, get the best price. That's basically what this is. It's an exchange. You go to an exchange and you shop around and you get your best price. That's going to help, in my judgment.

I also think that we should -- the hospitals should publish the cost of their basic procedures, whether it's appendectomy or colonoscopy or what not, to enable consumers to shop around where is the best price. We all know that there's a wide disparity in what hospitals charge for the same procedures. You know, I think the disinfectant of sunshine helps. It helps consumers. It helps our people.

And fraud and waste, we talked about that. We have major provisions in our bill to (INAUDIBLE) fraud and waste. Mr. President, I compliment you because in your proposal, you go even farther.

OBAMA: We took some additional ideas from folks like Congressman Barrasso (ph).

BAUCUS: They're -- they're great ideas and address, you know, unnecessary readmission rates from hospitals, et cetera.

The main point is we basically agree. There's not a lot of difference here, and I'd just like us to kind of just, you know, it's an opportunity for us to work out some (INAUDIBLE).

OBAMA: Mitch, is there somebody --

MCCONNELL: Yes, Mr. President, I'm going to yield to John here.

OBAMA: Oh, John?

REP. JOHN A. BOEHNER (R-OH), HOUSE MINORITY LEADER: I'd like to yield to Dave Camp and continue this conversation about cost containment.

(CROSSTALK)

REP. DAVE CAMP (R), MICHIGAN: Thank you, Leader Boehner.

And thank you, Mr. President, for the invitation today.

I think as we focus this part of the conversation on cost, a lot of Americans say to me, "If you're really interested in controlling costs, well, maybe you shouldn't be spending a trillion dollars on= health care, as the Senate and House bills do."

Also, cutting Medicare benefits by a half-trillion dollars to fund this new entitlement is I think a step in the wrong direction, and many Americans do as well. The nonpartisan actuaries at the Center for Medicare and Medicaid Services say on page four of their letter on the Senate-passed bill that it would bend the cost curve in the wrong direction by about a quarter-trillion dollars. They specifically say the health expenditures under the Senate bill would increase by $222 billion.

A key way of reducing costs that's missing from the House and Senate bills is responsible lawsuit reform that guarantees injured parties, much like our two largest states have adopted -- Texas and California -- access to all economic damages such as future medical care. If they need nursing care in the future, they'll get it, lost wages, reasonable awards for punitive damages and pain and suffering.

On page four of its letter to Senator Hatch, CBO found that this common sense reform would reduce the federal deficit by more than $50 billion. Now, that's just on the government side, because as we know, CBO doesn't score the private side on this. And PriceWaterhouseCoopers has done a study that said savings could be as high as $239 billion if this reform were adopted.

There are two features in the House and Senate bills that move in the wrong direction. Both bills feature restrictions on health spending accounts where people can save tax-free for their health care, as well as FSAs -- flexible spending accounts. These changes are such as they ban the use of over-the-counter medications, out of both of these plans. There's a new cap on FSA contributions of $2,500. That text, that language is found on page 1,959 of the Senate bill. And that will hinder the growth of those plans, and -- which encourage Americans to consider quality and price when they purchase health care.

And let me just say under HSA plan, premiums increased just 1.3 percent for individuals in 2007 to 2008, and declined 5.4 percent for families in that same period. And when people switch from a PPO, a preferred provider organization, to a health savings account, their premiums declined by an average of $3,800.

Now, another concern I have in the Senate bill, which on page 982 creates an unelected board charged with recommending even more Medicare reductions. And if Congress doesn't accept these recommendations, they have to find other Medicare spending to cut instead. And that gives, I think, too much authority to unelected bureaucrats, rather than to elected representatives of the people, and the power to decide whether to cut Medicare and by how much.

Now, holding down health care costs for the government is important, but I think it's also important to hold down costs for families and employees.

OBAMA: Dave, I don't mean to interrupt, but the -- we're going to have the whole section talking about deficits and we can talk about the changes in Medicare. We were trying to focus on costs related to lowering families. And, you know, the only concern I've got is, look, if every speaker at least on one side is going through every provision and saying what they don't like, it's going to be hard for us to see if we can arrive at some agreements on things that we all agree on.

So I don't want to try to cut you off, but please finish up, but I just want to kind of point out the --

CAMP: I'm almost done. I do want to say on this issue on -- on premiums, CBO in their letter on page four does say that the estimated average premium per person for non-group policies would increase by 10 percent to 13 percent.

OBAMA: This is -- this is the discussion that I just had about Lamar.

CAMP: Yes -- they do say that, and they do say that the value of the benefit is higher, and that is why it goes up. But the reason the value of the benefit is higher is because of the mandates contained in the legislation. And this is one of our big concerns with a lot of the issues that have been raised.

Yes, we have similarities, but when all of this is structured around a government-centered exchange that sets the standard for these policies, states can't get out of these requirements unless they seek a waiver from the secretary. That kind of approach raises costs.

And so both of your comments were correct that costs do go up and it's because they have a richer benefit, but the reason it's richer is because of the mandates contained in these very large bills.

OBAMA: OK. I'm going to let Rob -- feel free to respond to anything they've indicated, or to any of the other issues that have been discussed.

REP. ROBERT E. ANDREWS (D), NEW JERSEY: Thank you, Mr. President.

BLITZER: All right, let's take a little break from this hearing, get some analysis of what's going on. Ed Henry is standing by over at the White House, Dana Bash up on Capitol Hill.

What, Dana, has jumped out at you so far?

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well, I think I can just give a little bit of color of what's going on in and around this summit. I'm sure your BlackBerry is smoking, mine is too.

The fact of the matter is that both republicans and democrats are using this like a campaign event or like a State of the Union, like a debate. And we are getting e-mail after e-mail from both sides trying to fact check what is going on inside the room. And as you can imagine, for example, on the premium issue, got an e-mail right away actually from a republican who happens to be in that room trying to say the president is wrong on this whole question of whether CBO says premiums would go down. Republicans are right. That's just one little example.

But the other thing is that you are hearing a lot of the message from the democrats talking about how republicans have some ideas that they have adopted, and that is definitely true. But it doesn't sound like much has changed big picture yet, and that is that democrats still believe fundamentally that the best approach is a big comprehensive bill. And as you heard from Lamar Alexander at the beginning, they think that that is absolutely the wrong approach and the two sides have not come even close to together on that.

BLITZER: Stand by, Dana. Ed Henry is at the White House.

What sort of jumps out at you, Ed? ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: What struck me, as Dana points out, there's sort of this same old back and forth inside the room but also outside the room. And yet, what we're not seeing is any progress on any side. Anyone on either side saying, OK, I'm willing to give a little bit on this issue or that issue. Instead, we're hearing a rehashing of what we've heard for months now, again, on both sides. And it seems to be the stream of speeches, democrat or republican, and nobody really wanting to talk about how they might meet each other halfway.

We've been doing this series all week at CNN about broken government. This may be potentially "Exhibit A" for how -- you know, there was a lot of hype heading into the summit, maybe this is a chance for both sides to come together, maybe somehow the president is going to back the republicans into a corner, make them compromise. At least in the early first 90 minutes or so, I'm not seeing any real chance for progress from this at all -- Wolf.

BLITZER: John Avlon is here as well, the writer for "The Daily Beast."

John, we keep hearing from republicans making their statements what they don't like about the democrats' plans. The president keeps appealing to them, well, tell me something you do like. Haven't heard anything substantive on that score. But he seems to be frustrated he's not getting that message from the republicans.

JOHN AVLON, SENIOR POLITICAL CORRESPONDENT, "THE DAILY BEAST": But I tell you, Wolf, I really do think what we're seeing is a lot of civility and substance. I mean, outside Washington, where I think folks get caught up in the spin cycle and the back and forth, this is a civil discussion with folks sitting across a table. And it reminds most independent voters of what they know in their hearts, that when people sit around a table together, they can focus on what unites them, not what divides them.

And even though this may be a lot of posturing seen from a Beltway perspective, I think we have seen time and time again areas in which there is clear agreement. So I think the American people ask, why are they so deadlocked, why are they so divided, can't we define the common ground and then build on it. That's the standard the president set out, that what I think there's an opportunity to do here. If they can get out of their positional bargaining and focus on the common ground and then build on that, they may make some breakthroughs that would surprise some folks back in their bunkers.

BLITZER: Yes, they would be pretty surprised.

Let's go back in the room now. The discussion is sort of heating up.

OBAMA: The -- this has been a useful conversation.

Paul Ryan wants to -- wants to make a comment --

(CROSSTALK) MCCONNELL: Mr. President, can I just interject one quick point here, very quick, just in terms of trying to keep everything fair, which I know you want to do.

To this point, the Republicans have used 24 minutes, the Democrats 52 minutes. Let's try to have as much balance as we can.

UNIDENTIFIED MALE: I think the Republican leaders are controlling the time for the Republicans, if I'm not mistaken. That right?

OBAMA: I don't think that's quite right, but I'm just going back and forth here, Mitch.

(LAUGHTER)

OBAMA: I think we're just trying to go back and forth, but that's OK.

Paul, I was about to call on you, if that's all right. Go ahead.

REP. PAUL RYAN (R), WISCONSIN: All right. Rob, here's basically what we're looking at. The difference is this. We don't think all the answers lie in Washington regulating all of this. So the problem with the approach we are seeing that you're offering, which I do believe, Senator, is very different than what we're saying, is we don't want to sit in Washington and mandate all of these things.

So what you're (INAUDIBLE) is you're defining exactly what kind of health insurance people can have, you're mandating them to buy this kind of health insurance.

And so we simply say, look, if the National Restaurant Association or the National Federation of Independent Business on behalf of their members wants to set up an association health plan, we think they'll probably do a good job on behalf of their members. Let them decide to do that instead of restricting insurance competition.

By federalizing the regulation of insurance and by mandating exactly how it will work, you make it more expensive and you reduce the competition among insurers for people's business.

We want to decentralize the system, give more power to small businesses, more power to individuals, and make insurers compete more. But if you federalize it and standardize it and mandate it, you do not achieve that.

That's the big difference we have.

ANDREWS: Paul, Paul, would you yield?

Mr. President, may I ask him to yield?

OBAMA: We're not in a formal hearing here. So the -- go ahead.

ANDREWS: Paul, I read your -- I read your (INAUDIBLE) and I thought one of the things that you said is that there should be some minimum consumer protections in the exchanges that you proposed. Did I get that wrong?

RYAN: And there are in every state. And so what we're simply saying is, look, lots of us have offered lots of different ideas. We've got dozens of Republican ideas offered in the House in bills, in the Senate, and many of us look at the point of the fact that the states -- you know, do we distrust our governors? do we distrust our state legislatures? Do we distrust all the state insurance -- OK, some of you may do that.

(LAUGHTER)

ANDREWS: Depends on who it is.

RYAN: (INAUDIBLE) should we regulate all this? Should people in Washington decide exactly how this works and what you can and cannot buy?

(CROSSTALK)

OBAMA: Paul --

RYAN: It's just a difference in philosophy.

(CROSSTALK)

OBAMA: No, no, no. Look (INAUDIBLE) this is an important point. We've got a couple other people who want to speak. We've gone about (INAUDIBLE) minutes on this section. We're running over because we went long on the opening statements.

And you're right, there was an imbalance on the opening statements because I'm the president and so I made --

(LAUGHTER)

I didn't -- I didn't count my time in terms of dividing it evenly.

In this section, Mitch, we've gone back and forth.

REID: Senator Schumer --

(CROSSTALK)

OBAMA: I know -- I know Senator Schumer wants to speak and I know that Jim Clyburn wants to say (INAUDIBLE) very quickly.

MCCONNELL: And Jon Kyl would like to.

OBAMA: And Jon.

What I want to -- what I want to do, though, is just focus in on this philosophical debate. This is a legitimate debate. And it actually speaks to the point that Congressman Camp was making earlier about what's happening in the exchanges.

You know, when I was -- when I was young, just got out of college, I had to buy auto insurance. I had a beat-up old car. And I won't name the name of the insurance company, but there was a company, let's call it Acme Insurance in -- in Illinois. And I was paying my premiums every month. After about six months I got rear-ended, and I called up Acme and said, "You know, I'd like to see if I can get my car repaired." And they laughed at me over the phone.

Because really, this was set up not to actually provide insurance, what it was set up was to meet the legal requirements. But it really wasn't serious insurance.

Now, it's one thing if you got an old beat-up car that you can't get fixed. It's another thing if your kid is sick or you've got breast cancer.

So the general idea has been here that we should set up some minimum standards within the exchange, that a plan that people are buying into, whether it's a small business or an individual, should be at least solid enough that if your kid got sick, they're actually going to be treated, that if something happened that you weren't left with a huge bunch of out-of-pocket costs.

It is true that you can always get cheaper insurance if it has really high deductibles or really high copayments or doesn't cover as many things. And so there has to be a balance that's struck there.

I just want to point out, though, that the principle of pooling is at the center of both the Senate and the House bill. And the reason I'm pointing this out is because there was a lot of talk about government takeover of health care. And the implication, I think, was that everybody was going to have to sign up for a government health care plan.

Now, that's not the issue. What the issue here, which we've had an honest disagreement about, is how much should government set a baseline versus just letting people decide that, you know, I can't really get decent insurance, but, you know, maybe this is better than nothing?

And that's a legitimate argument. I don't disagree with that. But I just want to point out that when we start talking about how much government involvement we're -- is at issue here, it's not because the House or the Senate bills are a government takeover of health care, it is that the House and the Senate bills put in place some regulations that restrict how insurance companies operate, and if there's an exchange or a pool that's set up, that there is a baseline sort of minimum requirements that were expected.

And I understand that there may be some philosophical differences on the other side of the aisle about that issue.

Chuck, go ahead.

SEN. CHARLES E. SCHUMER (D-NY), VICE CHAIR, SENATE DEMOCRATIC CONFERENCE: Thank you, Mr. President.

BLITZER: Let's take another quick break and continue our coverage on the other side, this discussion that's becoming very substantive, important. The debate will continue right after this.

(COMMERCIAL BREAK)

BLITZER: Senator Chuck Schumer of New York is making the democratic case for health care reform.

SCHUMER: -- we're going to cut some of that out.

And when I hear my friend Dave Camp say you cannot cut money out of Medicare, well, we don't want to cut the good stuff that you point out or not -- prevent -- add the prevention.

But if we're going to -- if one-third -- if what Senator Coburn says, that one-third of Medicare doesn't go to patient care, you can't just get up there and say we don't want to cut anything out of Medicare. We want to cut the bad stuff and keep the good stuff.

And I think that's where we can find common ground on some of the things you've mentioned, some of the things that in our bill. And I hope at least in this area we can move forward that way.

Because, frankly, the Republican Party has always stood for getting rid of the waste, fraud and abuse in the system. In '97, it was the centerpiece of your program. And all of a sudden this year we're hearing, don't -- don't do any of that. That's something that I think we can come together on. I thank you.

BOEHNER: Mr. President, can we turn to Jon --

(CROSSTALK)

OBAMA: I'm sorry. You had Jon?

We're going to go to Jon, and then we're going to go to Jim Clyburn. And then I think we're going to take a break because we've run out of time.

So, Jon?

SEN. JON KYL (R-AZ), SENATE MINORITY WHIP: Thank you, Mr. President. I think you framed the issue very well just a moment ago, because there are some fundamental differences between us here that we cannot paper over.

And, Mr. President, when you said that this is a philosophical debate and it's a legitimate debate, I agree with that.

We do not agree about the fundamental question of who should be mostly in charge. And you identified this question -- do you trust the states or Washington? Do you trust patient and doctors making a decision or do you trust Washington? Now, there's a mix of both, of course, in health care. But there is a big difference between our approaches, and there is so much in the bills that you've supported that puts control in Washington that we have a very difficult time supporting those provisions.

And it's not a matter of just saying we all agree on the goal of reducing waste, fraud and abuse. We all do, of course. It's how you do it.

Now, let me give you a couple of examples. Dave Camp, I think, pointed out the answer to the dispute that you and Lamar Alexander had a moment ago, and he was exactly right.

Let me quote from the Congressional Budget Office letter, this is from Doug Elmendorf to Evan Bayh November 30th, 2009: Quote, CBO and Joint Tax Committee estimate that the average premium per person covered, including dependents, for new nongroup policies would be about 10 percent to 13 percent higher in 2016 than the average premium for nongroup coverage in the same year under current law.

Oliver Wyman, a very respected third-party group, says it's even more, about 54 percent. In my state of Arizona, a 72 percent increase.

Why is it so? For a variety of reasons, but one of which both you and Dave Camp agreed on. It is a richer benefit.

How did it get that way? Because the federal government would mandate it under your legislation in the insurance exchanges, and, as a result, there would be a higher cost.

How does this happen? There is an actuarial requirement of 60 percent actuarial value in the exchange for the least costly plan, but the average in the country today of a high deductible plan is 48 percent. The range today is 40 percent to 80 percent. And the average is between 55 percent and 60 percent.

So what the government is doing here is saying we're going to mandate that the insurance cover more things than it does right now and, therefore, the cost is going to go up.

Second example, you say, "How can we help small businesses?" Well, we know one way you don't help small businesses is by raising the payroll -- the Medicare payroll tax on them, which is what this legislation does. Besides that, it's a job killer. Look at the taxes on beneficiaries as well.

This is a third example. You don't cut costs when you raise taxes on medical devices that help us, when you raise taxes on pharmaceutical products, when you raise taxes on insurance premiums themselves. Quote, "these fees on insurers, medical devices and pharmaceuticals would increase costs for the affected firms, which would be passed on to purchasers and would ultimately raise insurance premiums by a corresponding amount," Congressional Budget Office.

So when you raise these taxes and all of the different fees that are in this legislation, it inevitably increases the costs on the consumer.

And why do you have to raise all of this money? Because of the expenses of the legislation that underlie all of this.

That's why Republicans would rather start not by having to raise a lot of money in order to pay the high cost of this bill, but to start a piece at a time, directing solutions to specific problems.

That way, you don't incur all of the costs upfront, which require you to raise the taxes.

A last quick point: One of the worst things about this is for people that have catastrophic medical expenses today, after you've spent 7.5 percent of your adjusted gross income, you can -- you can deduct that.

This bill would raise that to 10 percent. Who does that hurt? The very people you promised, Mr. President, that you wouldn't allow taxes to be raised on. Average age, 45. Average income, $69,000. These are not wealthy people.

BLITZER: All right, republican Senator Jon Kyl continuing to argue that the democrats' plan would increase premiums for American families out there. The president has a very different assessment. We'll hear what he says, the other democrats say. We'll continue our coverage.

And Ali Velshi is at the Fact Check Desk for us. He's fact checking a lot of this. We'll have him.

Remember CNN.com, you can see all of this live, streaming. Our coverage continues after this.

(COMMERCIAL BREAK)

BLITZER: President Obama's responding to republicans, who say that his health care bill is simply way too expensive.

OBAMA: So what we're basically saying is we're going to do the same thing for these other folks that we do for ourselves -- on the taxpayers' dime, by the way.

Now, there is a legitimate philosophical difference around that. But I think it's just very important for us to remember that saying there's a baseline of coverage that people should be able to get if they're participating in this big pool is not some radical idea.

And it's an idea that a lot of states -- you know, we were talking earlier about what states do. And a lot of states already do it.

This, by the way, goes to the other difference that we have when it comes to interstate purchase of insurance. Actually, this is a Republican idea, been championed by the Republicans. We actually agree with the idea that maybe if you get more regional markets and national markets as opposed to just state-by-state markets, you might get more choice and competition. People might be able to say, "Gosh, there's a great insurance company in Nevada, and I live in New York, and maybe I can purchase it."

That's actually something that we find attractive. So do you guys.

But, again, the one difference, as I understand it, and the reason you're not supporting the approach that we take is what we say is there should be sort of a minimum baseline benefit, because, if not, what ends up happening is you get a company set up in Nevada -- let's assume there were no rules there, there are no protections for the woman who's got breast cancer. They go into New York. They offer pretty cheap insurance to everybody who's healthy.