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Understanding Obamacare

Aired June 30, 2012 - 16:30   ET


DR. SANJAY GUPTA, HOST: Hello and thanks for joining us. A very important week here. I'm outside Bellevue Hospital, which is the oldest and one of the largest public hospitals in New York City.

You know what I'm here today to try and answer your questions -- about changes that are coming to your medical care and your insurance. This is something that affects all of us.

It has been a monumental week. And, you know, I've watched everything unfold certainly as a journalist but also a doctor and even after all the bitter fighting over the president's health care law, we had to wait and see if the Supreme Court would give its seal of approval. Well, we now know this week, it did. The court upheld the law.

Now, you've been sending me questions about what that all means for you. I'll try and answer as many of them as I possibly can.

Here is my promise: By the end of this half hour, you will understand all of this better than you do now.

But, first, I want to take a moment to put everything in perspective, just for a second. Whether you support this decision or not, this is a huge deal. This law now means all Americans should have access to health insurance coverage. Now, of course, the price tag is high which is in part why this has been such a controversial idea for more than 60 years.


GUPTA (voice-over): In putting his signature on what came to be known as Obamacare, the president did what others had tried to do and failed, many times since World War II, starting with Harry Truman.

ALLAN LICHTMAN, PRESIDENTIAL HISTORIAN, AMERICAN UNIV.: He wanted to increase the availability of doctors and hospitals and have the government serve as a guarantor of insurance for all Americans.

GUPTA: But in Congress, Truman's plan never got so much as a vote.

LICHTMAN: The American Medical Association, very wealthy, very powerful lobby group, also vehemently campaigned against Truman's health care plans.

RONALD REAGAN, FORMER U.S. PRESIDENT: We do not want socialized medicine.

GUPTA: In the 1960s, a similar fight, Ronald Reagan, before becoming governor of California recorded this message: pass Medicare and the United States would soon become like the communist Soviet Union.

REAGAN: One of these days you and I are going to spend our sunset years telling our children and our children's children what it was once like in America when men were free.

GUPTA: But Reagan's efforts fell short. In 1965, President Lyndon Johnson signed a law creating Medicare, health insurance for every American over the age of 65 and Medicaid for the poor. It wasn't just Democrats. Richard Nixon had big ambitions on health care.

STUART ALTMAN FORMER NIXON ADVISER: Richard Nixon, which I happen to work for, put forth a very comprehensive plan which looks a lot in structure like the Obama plan. And then you remember we had a little problem with Watergate and Nixon resigned and health insurance totally died.

GUPTA: By the early 1990s, there was the Clinton plan to cover every American without spending more.

HILLARY CLINTON, THEN-U.S. FIRST LADY: Health care reform must be achieved for the good of our country.

GUPTA: Too big, opponents said. Too expensive, too complicated.

LICHTMAN: We're going to lose our doctors. We're not going to be able to make medical choices anymore. It wasn't true but these kinds of arguments resonated.

GUPTA: Like Truman's plan, it never came to a full vote. Around that time, many Republicans, like House Speaker Newt Gingrich, started talking of something called a mandate -- a requirement that every American buy his or her own coverage.

LICHTMAN: By having a mandate, you can have universal or near universal coverage and still preserve the private insurance system. So the idea of a mandate was a Republican idea.

GUPTA: By 2008, Hillary Clinton now running for president was pushing the mandate herself.

CLINTON: I cannot stress to you how passionately I feel about fighting for universal health care.

GUPTA: As she ran against the young senator, Barack Obama. Back then, though, candidate Obama was against it.

SEN. BARACK OBAMA, THEN-PRESIDENTIAL CANDIDATE: Senator Clinton says, I'm going to make universal health care by mandating that everybody buy it. But if people can't afford it, it doesn't matter what the mandate is, they're not going to buy it.

GUPTA: But by election time, he had come around to Clinton's position.


GUPTA: Of course that mandate was just what the Supreme Court has just upheld. I'll explain how it all works in a bit. But as promised, this is the point of the show today, I want to get to as many of your questions as possible. Here to help me is my producer, Danielle Dellorto.

DANIELLE DELLORTO, CNN PRODUCER: Yes, thanks for having me.

We've been getting so many questions in. One of the ones we got on the CNN blog is from a guy named Jaleel. He's married with children. He said he's currently on Medicaid and he wanted to know, "How will this decision affect my access to Medicaid?'

GUPTA: You know, it's interesting. So, as part of this, as part of getting those 30 million people insured, they want to expand Medicaid. And what expanding Medicaid means is they raise the level at which someone qualifies. It used to be 100 percent of poverty level. Now it's going to go up to 133 percent of poverty level. So someone like Jaleel, I don't know his family situation, but if you're making $14,000 or less roughly he should be able to qualify for Medicaid.

In short, the answer to the question is that it shouldn't make a difference really at all. He qualifies now, he should still be able to qualify after it goes into effect.

DELLORTO: It's 14,000 for a single person or a family?

GUPTA: That's for a single person. So, there's a family I think it's closer to 29,000 or 30,000. The numbers are going to change a little bit by the year 2014, but 133 percent of poverty level.

DELLORTO: OK. Good to know.

We have another viewer who is actually on the phone right now. Her name is Delie. She is 56 years old. She's a diabetic. She recently lost her job.

So I think she's on the phone. She has a question for you.

DELIE (via telephone): Hi, Sanjay. My question is, I qualify for COBRA, but my monthly payment is somewhere near $600, which is more than half of my unemployment. I can afford it right now. I don't know how long I'll be able to though, depending on how long I'm out of work. How is the new law going to help people who are paying those kinds of rates? I mean, it's just --

GUPTA: Yes, I mean, frankly -- yes, frankly, I don't even know how you afford it now. Half of what you're getting in compensation.

Let me tell you a couple of things. First of all, everyone is going to have to have insurance but for those people who can't afford it, there's going to be tax credits up to 400 percent of poverty level. So you could potentially get some credit to help offset the costs.

Second of all, if you're making less than a certain amount of money as we were just talking about with another viewer Jaleel, below $14,000 a year roughly, you might be able to qualify for Medicaid.

Here's what I would tell you though. When people talk about this idea that you can no longer be discriminated against based on preexisting diseases, what that means for you specifically Delie, is this -- because you said you're 56 years old. Your health care premium should be the exact same as another 56-year-old person, a woman, living in your neighborhood, living in your community.

So that's really important. You said you have diabetes. People will no longer be able to be discriminated against based on preexisting conditions.

Also, finally, the premiums people can charge if it's over 8 percent of your income over all, you'll also be able to get tax breaks or tax credits as well. So, between those three mechanisms, you should be able to get some help. Again, some of this is not implemented right away, Delie, until January of 2014. But it sounds like some of those provisions will eventually apply to you.

Danielle, thanks. You'll be back in just a little bit with more questions.

And, Delie, I hope that helps you.

Again, real stories behind what's happening here. We're going to get to more of your questions in just a minute. But up next, that costs how much? I'm going to tell you why hospitals charge so much money for the services they provide.



FRANK: My name is frank. I'm 37 years old from Victorville, California. I'm just wondering about what about us who are unemployed and would rather keep the lights on than to pay for a mandated health care or the fines for not having it?


GUPTA: You know, thanks, Frank, first of all for your question.

And I'll assume you don't already have coverage. In that case, the way that this is going to work is you have to buy health care insurance and if you don't, you pay a fine. That's what the mandate means.

Now, let me give you some context, Frank and everyone else. In the first year, the penalty is $95 for an adult. And up to $285 for a family of four. Or 1 percent of your income, whichever is greater. It steadily goes up so. So, by the year 2016, it's $695 for an individual and up to $2,085 for a family or 2.5 percent of your income.

That gives you some idea of what you're trying to balance here, Frank. You know, buy health care insurance or pay those penalties.

Now, I should add for some people it won't apply. If there is no affordable plan in your area as determined by this formula, by a certain formula, then you're exempt from the requirement. You may also be eligible for a tax credit or Medicaid depending on your income.

Another question I get all the time is, that costs how much? Sometimes the cost of a hospital bill just seems preposterous. But here's why: hospitals charge so much for the services they provide.


GUPTA: One of the questions that comes up all the time is: what about these hospital bills, how exactly do you break down, how do you make sense of it? There's no question, it leaves a lot of people scratching their heads.

So I want to give you a little bit of an example here but taking you inside this operating room. This is the hospital where I work where I'm a neurosurgeon. And just having an operation performed in a room like this costs about $3,000 an hour. That's for starters.

Come on in. I'll give you a couple of quick examples.

If you look at a hospital bill, you might see an IV bag charge, so an IV bag like this, about $280 just for the IV bag. That might strike people as very high.

A stapler. This is a stapler that's often used in surgery, something like this costs about $1,200.

This is a chest tube, if someone has compression of one of their lungs, they might need a chest tube like this. That costs about $1100.

And you'll find examples like that really all over a room like this.

Suture -- something that's used in just about every operating room in the world. This type of suture over here costs about $200.

And if you look at even devices like -- this is a needle that's used for biopsies. So if there's a concern that someone has a tumor, they would use a needle like this and this is going to cost about $800.

Now, it's important to keep in mind, if you ask the manufacturers of a device like this, why so much money? They'll say well, it took years to develop something like this, the research and development costs are significant. Also they're guaranteeing a certain level of effectiveness of this needle. That cost money as well.

But something maybe you didn't know, when you look at a hospital bill, it's not just the cost of the supplies, there's also administrative costs that are built in. There's the cost of covering people who simply don't have insurance or can't. That's built into these costs as well.


GUPTA: Now, keep in mind -- whether or not insurance, pays those high costs will eventually be passed on to you, to me, to everybody.

Joining me now is one of our favorite guests, Andrew Rubin, from the NYU Medical Center. He oversees 1,400 doctors, also a budget of $800 million.

Thanks. Good to see you in person.

ANDREW RUBIN, NYU MEDICAL CENTER: Good to see you in person.

GUPTA: You just hear about these outrageous prices and then we also hear that at that particular hospital 4 cents on every dollar is in fact collected. So, outrageous prices but collections as well. What happens to the money here?

RUBIN: You have to understand something -- the costs is sort of an artifact of what's happened in health care over the past 20 to 30 years. I mean, hospitals get paid under contract and they negotiate with insurance companies. So, it's a bit of a game honestly. We want to inflate -- we wan to inflate our charges as much as we can so that when we negotiate with the insurance companies, we get the best reimbursement.

So, the costs -- you know, the charges are no longer necessarily relevant to what the actual costs are. But a little secret, Sanjay, is most hospitals know what their costs are and we just try and make it all balance out in the end.

GUPTA: Yes, 4 cents on the dollar so it wouldn't be surprising if something is 25 times the price.

But can -- let's say someone has a hospital bill right now and they're saying it is outrageous. I'm listening to Andrew Rubin talk. Can I call the hospital and negotiate this?

RUBIN: There are a lot of factors. I'm going to give you the quick answer here. If you have no insurance, you absolutely should call the hospital and negotiate. You want to ask about their self-pay policy. You want to ask them if they have a charity policy.

Many states regulate hospitals that have, you know, in their charity care policies. A lot of hospitals do it voluntarily. Even if you have insurance and you just want a discount, you should call and ask. They don't have to say yes. Some will definitely work with you to lower the bill.

GUPTA: It could be a laborious process. But I've actually heard success stories along those lines as well.

RUBIN: You have to ask. You can't run from your bills. People run from their bills. Biggest mistake you can make.

GUPTA: Read the bill as well.


GUTPTA: The Obama -- the plan Obamacare as everyone is calling it now is meant also to rein in costs. I've heard from doctors that say, look, does that mean that the reimbursements will be kept to me? And more to the point of our viewers, does that mean the quality of care for them is going to be affected as well? What do you think?

RUBIN: Well, I will tell you this -- I think it would be virtually impossible to reduce physician reimbursement. They fight with it -- you know, they currently fight over this every year in congress and every year the physician reimbursements stay the same.

I think the hospitals will be squeezed a little bit as part of health care reform. I don't see that happening to the doctors.

I don't think there will be a quality issue, but I do believe there will be a short-term physician access issue when we add 30, 40 (AUDIO BREAK) Americans to the health care system seeing doctors for primary care visits. I think there will be a short-term struggle to get that up and running.

GUPTA: They talked about some 20,000 primary care doctor shortage even over the next few years. So that could be amplified.

RUBIN: Exactly.

GUPTA: Again, it's good to see you in person. Look, I think we'll have a lot to talk about in the months and years to come for sure. So, I really appreciate it. Thanks so much, Andrew Rubin.

Up next, I've been fielding your questions via e-mail, via Facebook, via Twitter. Any way you can get them to me. I want to get as many of the questions as I can. What the Supreme Court decision really means for you and what it means for your family.

Stay with us.


GUPTA: And we're back with SGMD. I want to get to more of your questions now about the new health care law which the Supreme Court just upheld, as you know.

My producer Danielle Dellorto is back with me to help out.

Lots of questions.


Lots of questions. So, let's dive right back in.

This one is from Twitter. It reads, "I had knee replacement early because I didn't want the government deciding I was too old. #deathsquad."

Let's do a little fact-checking. Is Affordable Care Act really going to regulate who can get what care?

GUPTA: I think what they're referring to this notion of the "death panels," which was I think a lot of hyperbole. And I think people realize this at the time, this idea that people wouldn't be able to get care at the end of life. What they specifically said is there would be counselors available to people to counsel them on end of life issues, regardless that part of the provision went away.

What they do have is something known as an independent payment advisory board. So there will be people, you know, trying to decide how much doctors should get reimbursed, how much procedures should cost. But I should point out that already happens. It happens at the Medicare level. It happens by private insurance.

As a doctor, I've had to call people and ask them exactly how much would this actually reimburse? So this is just going to be a more cohesive plan.

By the way, that particular viewer hopefully the doctor just didn't do a knee replacement for the heck of it. It should still only get procedures if you absolutely need them.

DELLORTO: Good suggestion, doctor.

All right. Let's go to the next one from a roving street cam. I think we have a question from Heidi.


HEIDI: I'd be interested in knowing how the -- under the new Obamacare, my copayments and premiums would be lower.


GUPTA: This is an interesting question and we get this quite a bit. But I think I'd be hard-pressed to say that for sure premiums would lower at this point, Heidi. I think that we just don't know yet.

There was a lot of talk about the fact that everyone's premiums might reduce by $2,500. We clearly haven't seen that yet and health care costs do continue to go up. What I would say though is with regard to preventative care if you're going to get cancer screenings or anything that falls into the realm of prevention, not only will there not be costs associated with that but there should be no copays either so that is important because a lot of people avoid those tests. It's completely free now.

DELLORTO: Yes, that's really great advice.

OK, there's a question right up here. I know you recently spoke to Governor Romney's health advisor. This question is from Twitter. Frank wants to know, "What would the Republicans want to do with all the uninsured people?"

GUPTA: You know, it is a very interesting question especially given that the candidate is Governor Romney who started the health care plan in Massachusetts.

I don't know that we absolutely the answer yet, but I will say a couple things. When I talked to the health care adviser, they were very much against the mandate at the federal level. That issue is obviously, at least for the time being has been settled.

But they did not want to get rid of the idea that people would be discriminated against for preexisting diseases. They thought that they wanted to keep it in.

A couple other important points that he told me. One is that you could buy insurance across state lines, and that's important because if you want to lower premiums they say, increase competition. So if I live in Georgia, I could buy health care insurance in Montana. And, you know, that would be the best plan for me.

They also talk a lot about incentivizing healthy behavior. So instead of penalties or taxes saying you know what? We'll give you an incentive to be healthy to lose weight to do things that might actually improve your health.

DELLORTO: All right. So, we'll see what hams. He could possibly repeal it if elected.

GUPTA: He keeps saying repeal, the whole thing, which is a little different than what the health care advisor told me, who very much said there are certain things they want to keep in that are very popular.

All right. And, Danielle, thanks for the questions as well.


GUPTA: Still ahead, something you have to see. I've been amazed by the story. Why this doctor has been charging just $5 a visit since the 1950s.

Stay with us.


GUPTA: You know, for all the talk about changing the system, hospitals, insurance, we know to get the best care, patients often have to take matters into their own hands. Roxanne Black is a pioneer.


GUPTA (voice-over): It was 1988 when Roxanne Black launched a national support group for patients with chronic illness.

ROXANNE BLACK, FRIENDS' HEALTH CONNECTIION: It was really a simple concept. It was based on my own need that I wanted to find a friend.

GUPTA: At the age of 15, Black herself was diagnosed with an autoimmune disorder lupus.

BLACK: I felt like no one could relate to me because all of my friends were healthy. They had a lot of empathy but they couldn't really understand whey was going through.

GUPTA: She started the Friend's Health Connection in her dorm room, with an old commuter and decimal system library boxes. Back then, social networking meant handwritten letters and index cards.

As the word got out though, patients would write to Black who would match them up with patients around the country who had a similar condition.

BLACK: When someone would fill out a questionnaire, I'd extract their information and put it on an index card and then filed all the breast cancer patients together, all the cancer -- all the diabetic patients together, all the arthritis patients together.

GUPTA: From its humble beginnings in her dorm, the Friend's Health Connection has expanded to become a comprehensive global support network.

BLACK: We connect people with the same health challenges. We provide health education without barriers of transportation or anything. And then we also have virtual support groups.

GUPTA: Black is also thriving. She's the full-time executive director of the organization, a wife, and a proud mother now to her little daughter Analise (ph).

BLACK: My own wellness (ph) have kind of empowered me to say I want it all, but I want what really matters.


GUPTA: Well, as you know, we've been talking about health care this entire half hour and what really matters to most patients is cost. You know, with the economy hurting, fewer Americans went to the doctor last year, even though those visits are crucial to early detection and prevention as you know.

So, for this week's chasing life, I want you to meet this guy, Dr. Russell Dohner. He is 87 years old. To make sure people don't ever skip a visit because of money, he only charges $5 for appointments and his doors are open seven days a week.


DR. RUSSELL DOHNER: I felt like there was always somebody who was sick. So before I'd go to church I would come here.


GUPTA: Doc Donor as his patients call him, he has been practicing in Rushville, Illinois since 1955. He's delivered more babies than the town's entire 3,000 person population.

You know what? He is a good reminder in the midst of all this discussion about health care, see your doctor. You can do it and do it often.

That's going to wraps things up for SGMD today. But I'm going to see you back here next weekend. Meantime stay connected at Also let's keep the conversation going on Twitter this week @SanjayGuptaCNN.

Time now to check your top stories on the "CNN NEWSROOM."