C-SPAN/NEWSMAKERS

Host: Steve Scully

Guest: Pete Stark, Representative, Ways and Means

Reporters: Alex Wayne, Jeffrey Young

ALEX WAYNE, CQPOLITICS.COM: Congressmen, you guys unveiled a very ambitious health care proposal today. From looking at it and from what we know about other similar proposals under consideration in the House, it clearly is going to cost a lot of money - more than $1 trillion I think is a fair number to throw out there – over 10 years. Can you talk about how you plan to pay for it?

REP. PETE STARK, DEMOCRAT CALIFORNIA: Well, first of all, that’s not a very fair number, because there is no number. As you know, a few days ago we distributed to all of you a 700-page tome – it being Father’s Day I haven’t had a chance to finish it yet – that defines an outline that the three committees of jurisdiction in the House have agreed to: Ways and Means, Energy and Commerce, and Labor. It is not been scored by CBO because the legislative language is not complete.

Let me give you an example. There will be, I'm quite sure, a subsidy for small business. Now, that could run billions of dollars in difference. I doubt very much if the bill itself will go over a billion dollars a year for 10 years. Yes. I mean 100 billion a year for ten years.

WAYNE: You have a relatively generous subsidy program, though, for middle class people.

STARK: It – we have a range. Again, it – this is a plan that defines how we’re going to get affordable quality medical care to every American. The numbers that I can tell you that we’ve had is that the outline - again, subject to a lot of change – provides 95 percent of the Americans coverage, up to maybe 97, which is what I'm hoping for. OK? And I'm not being coy, it’s just that all of these things interact.

And until we agree on the final legislative language, we can’t get a final price. If you wanted to say 100 billion and I said 800, I’ll end up fighting with you, but we don't know yet. And what we hope to get after we have hearings next week is the ability to dial up or dial down. So if we need to save some money, can we cut the small business exemption. Maybe, I don't know politically whether we can. Can we raise the amount that we pay for children’s health care. So all of those things interact. And the truth is that we are in this framework and we’re a week away from finalizing it.

JEFFREY YOUNG, THE HILL: You know, I – people talk about the amount this costs. With that money you're also buying something.

STARK: Oh, indeed.

WAYNE: Absolutely. So over on the Senate side, they've evidently been struggling with this with some of the preliminary numbers they've gotten to achieving the basic goals, the same ones that you've laid out covering nearly everyone, addressing the long-term cost issues, trying to get in and change the incentives to change quality – to improve quality and all those things. They've been struggling to find a way to do that and keep the price tag below a trillion dollars. Which – I mean, so my question for you is do you think roughly a trillion dollars over 10 years is enough money to achieve all those objectives?

STARK: Well, first of all, I have no idea what the Senate is doing. Seriously. I mean, they're here again, there again. You've got different plans. I know that the three committees in the House are pretty much in total agreement. We have different jurisdictions in each committee. So Energy and Commerce will do Medicaid, which I don't – I don't know a lot about their provisions. We on Ways and Means will do Medicare and Labor will take care of the Arista (ph) issues and the labor issues. When we finally come together there will be three bills. They will be different only in the jurisdictional areas. Then we will meet, and I think without much trouble at all, be able to meld those bills into one.

So I think that by the Fourth of July recess you will see a complete bill with costs – with cost estimates. And that’s what we’ll go with. After the recess we will start to mark up on that bill. Now, that’s a tough schedule. And this is the first weekend the staff will have time to get to bed before two or three in the morning. Because, as I say, getting this all drafted has been a big chore. And listening to all the people. We’ve had hearings, we’ve had input from the providers, input from the beneficiaries groups, input from the AMA, the AARP. Every group in town has been giving us their interests, and we’ve been tried to where we can to accommodate what we think are reasonable interests toward getting this goal of north of 95 percent of every American with affordable quality health care.

STEVE SCULLY: But have you had input from Republicans? Will this be a bipartisan bill? Because they say it’s not.

STARK: Yes. To the extent – Dave Camp (ph), Wally Herbert (ph) and I, we had a meeting scheduled which we had this 80-vote thing earlier last week and kept us from meeting. But I met – I have met several times with Dave Camp (ph), we’ve discussed our relative problems and we are planning, I hope next week early, to meet with them as a group. They, as you know, have a short outline of their bill. They've seen – and they're getting all the information from us. They're receiving all of our 300 or 700 pages or whatever. So the staffs are working hand in glove. And there are differences, obviously. But we’re not – we’re keeping them informed and they're keeping us informed.

SCULLY: A lot of debate in the Senate on single payer option. Will that ultimately be part of the bill do you think?

STARK: It’s absolutely an essential part of the bill, without which it would be impossible to have competition.

SCULLY: Because …

STARK: And to assure the American people that they have a choice of plans, because nobody trusts the private insurance companies. All they do is figure out how to not give you coverage. Private insurance companies spend all kinds of – there’s this guy Geller (ph) just had testimony. They are going to support rescission. Do you know what rescission is? Rescission says after you get sick we’re going to cancel your health insurance. Humana, WellPoint all said they refused to do away with rescission. We’re going to make them do it in this bill. I mean, we are going to regulate the private companies and the public plan will meet the same regulations, so that when you go to the exchange, if for some reason you don't have insurance, through the benefit of C-SPAN who treats the public so well, you'll have the choice to go into the exchange and pick a plan. Pick a private plan if you like it or you can pick the public plan. And then – I'm sure there will be several private plans.

SCULLY: Jeff Young.

YOUNG: I’d like to follow up on the public plan question a little bit. And of course this gets talked about a lot. As you know, Republicans seem pretty friendly lined up against it. They've been, you know, vocal about how, you know, they can’t imagine ever voting for something that has it in there. But there’s also some concern and opposition to something resembling what is in the draft bill that you and your colleagues put out on Friday on the Democratic side. So my question is, are you confident that at the end of this process that you – that your bill will attract a majority or nearly all of House Democrats in spite of the concerns expressed by some of the more conservative members of the party about the public plan.

STARK: Well, there’s some – there are some concerns expressed by the more liberal group of the party who might like to have single payer. There are some concerns, you know, I suppose by the Christian Scientists who want to do other things. But at the end of the day, if you choose to have competition and you choose to have a plan that’s dependable and affordable, you can’t do it without having a public plan there. And that creates the competition from the private plans. So, yes, there will be a public plan in the bill. Will they – people vote for it? I don't know. Who wants to go home at next year’s primary and say I voted against a plan that’s going to provide, let’s say, 30,000 people in my district, most of whom are non-white, most of whom are poor, most of whom are working, most of whom who don't have a way now to get insurance, I voted against giving them a way to pay their doctor and their hospital for medical care. I don't think that’s a vote many people want to make.

WAYNE: Isn’t that an easier vote to take, though, if the bill costs a trillion dollars or more and is paid for with, say, tax increases?

STARK: It’s premature to suggest how the bill will be paid for. Let’s say the bill is paid for by cuts in provider payments. Will that help the bill (ph)?

WAYNE: Can you find a trillion dollars in provider payments?

STARK: Well, that’s what we’re – that’s what we don't know yet. That’s what we hope to find out. The process that we’re following is to say let’s put a bill out there, which is our first step, and see if it can provide the benefits that the President has suggested he wants and that we Democrats in the House want. Then once that’s in legislative language, we have to get the cost. And it’ll cost more – if it’s the bill I want it’ll cost more than we’ll be able to do. So then we have to figure out – and we don't know yet – how we adjust various pieces. And many of them are interrelated. They're subsidies. How much do you subsidize the various – how fast do you phase the subsidies in. All of those things relate to the costs. And our thought was first we’ll put the benefits down there, secondly we’ll get a cost, and then adjust as we must.

WAYNE: Regardless of how you pay for this, Democratic leaders have said that the bill is going to be budget neutral. Is that still the way that you're headed?

STARK: Yes. There is this – there’s an issue of doctor – physician reimbursement that we have to take off the table that’s – and then we go pay go from there on. It’s about 285 billion that the Republicans let build up for the – not making the physician cuts. We plan to change that in this bill. Hopefully it’ll be done administratively by the administration and that will be off the table. But assuming that’s off, then we’re pay go from there.

WAYNE: I'm sorry, you're saying that that fix to physician reimbursement, that’s not going to be paid for, it’s not going comply with …

STARK: I think that will get re-based. My guess.

WAYNE: That means it’s not going to be paid for, correct?

STARK: No. And there’s no way it would be paid for anyway. It wouldn't be cashed. It’s just a bad credit card. It’s one of those things that has been postponed and put off every year by the Republicans as they went ahead and gave the physicians an increase without paying for it. And it’s a bookkeeping entry. Let’s say it’s a credit card that’s going bankrupt.

WAYNE: But it will add to the deficit nonetheless.

STARK: No.

WAYNE: Why not?

STARK: Because it will be re-based and it won’t add to the deficit. If it’s done administratively.

WAYNE: OK.

STARK: OK? That’s budget legerdemain. It’s above my pay raise.

WAYNE: I'm not sure exactly how that works.

STARK: I'm not either, but I’ll take it.

YOUNG: I’d like to ask you about sort of different subject.

STARK: Sure.

YOUNG: Because we’ve talked about coverage for the uninsured. You mentioned the exchange people can go to pick a private plan or the public option. We talked about the public option. I wonder if you could – if you could elaborate a little bit on something the president’s talked about, which is how a bill like yours – or this bill, this draft that you're working on – how will this be beneficial for middle class people who already have health insurance.

STARK: If they like the health insurance they have – and let’s say that’s 160 million people getting it through their place of employment now – they'll keep it. Americans don't like change. If I said to you, all of you in your listening audience, January 1 2010, your health insurance ends and Pete Stark is going to bring you a new plan, they'd be eight million people out here on the mall ready to nail my hide to the Capitol door. They like what they have. I like Medicare, people like Blue Cross or Kaiser in my district.

They'll stay where they are. So for the vast majority, as the President said, if you like what you have, you can keep it. For those people who are afraid that they're going to get laid off or the Chrysler employees if Chrysler goes bankrupt and you wipe out the plan, they are the ones who will benefit in the sense that they can now go and get a plan. Not an individual plan that may have exemptions or pre-existing conditions and may price them out of the market if they're – if there’s a history of high blood pressure. That’ll be gone. So they'll be able to go in and basically get a group rate of – and a plan that will provide them benefits that they can’t lose.

YOUNG: But does the bill do anything to make the insurance – if people like what they have and they're going to keep it, is this bill going to do anything to make that insurance coverage better or less expensive.

STARK: We hope so. And that will be through the public plan. Because if the rates will set, we’ll force the competition. Secondly, there will be changes in the insurance laws that will not allow them to medically underwrite. They'll have to have universal pricing, they’ll by – change by age groups. But basically there will be some protections built in against the private insurance companies ripping people off, as evidenced, for instance, in rescission and things like that. And so private market will become more fair, more consumer friendly. And hopefully with the public plan establishing rates, we’ll push people to better rates.

SCULLY: But, Congressman, if you like what you have, if you have an employer based plan and nothing changes ...

STARK: Yes.

SCULLY: ... will you be taxed on that under your plan?

STARK: No.

SCULLY: So where’s the money coming from?

STARK: Where is what money coming from?

SCULLY: To pay for this – whatever – whether it’s 500 billion or a trillion …

STARK: Well, either – as I said, when we get the CBO (ph) estimates, a good bit of it will come from a reduction in payments to providers, a good bit of it will come through the pay or play issues. The employers who choose not to participate will pay. You will pay, I will pay, every – everybody who doesn't have a plan will pay something. Even the – even the lowest income people will pay a little bit of something toward the exchange plans, for which they can choose any plan in the exchange. But there will be …

SCULLY: But you're saying no tax on your current insurance plan, that you – middle class families will not be taxed as a source of income.

STARK: I don't know what – I'm not sure that middle class families – it depends on what you call a tax. They may very well – if they choose not – if they don't have a plan or choose not – they'll pay a – something under the mandate. You call it tax, I would call it a fee. But, yes, everybody will be pay something. Employers, employees, providers. We’re all in it.

WAYNE: You're talking about several – possibly several hundreds of billions of dollars worth of cuts to Medicare payments to providers. The bill includes a public insurance option that would compete with private insurers. It also includes new requirements on private insurers. You also have a so called pay for play requirement in there for businesses. It looks like you're going to wind up with a bill that’s opposed by doctors and hospitals, that’s opposed by the insurance industry, that’s opposed by businesses. How do you – how do you get it passed in the face of that kind of opposition?

STARK: Well, before you make that as a statement, if that’s a statement, with which I wouldn't agree ...

WAYNE: That’s a guess. It’s a hypothesis…

STARK: ... come to the hearings that we’re going to have next week and hear the hospitals, the for profit hospitals, hear what their witness will say. Hear what the AARP is going to say, hear what AMA is going to say. For AMA, it’s a big improvement in the payment to physicians, which I think they're going to want. It’s a marvelous new way to reimburse physicians. Even though I didn't write it, it’s a pretty good darned good new plan. And so there are benefits. Plus, there are 40 or 50 million people who are now uncompensated, if you will, who charity has to take care of who will be putting money into the system because they'll have insurance. So I think every provider will – even though they're per procedure rate may drop, their volume rate and their total revenues may increase over the – over the period of the bill.

YOUNG: OK. I don't want to – I don't want to necessarily get stuck on one thing. Because as you pointed out, there are a lot of moving pieces that you have yet to figure out in terms of the cost and the financing for the bill. But in general, among the things on the table, are there various kinds of tax increases that the committee is looking at to raise revenue.

STARK: No. There is a – there is in there – I think it’s an eight percent of gross payroll charge to employers. And that’s in a bracket. So that may be – there may be six, maybe eight. I don't know where the final number comes. There are no other numbers. And in terms of what we do, I think everything is on the table.

Now, if you're talking about outside of the bill, will the Ways and Means Committee have to come in at the 11^th hour, there you could find as many ideas for taxes as you – are members of the Ways and Means Committee. And that’s completely undecided. I mean, people have talked about a variety of issues, but there is no – I would say there’s no consensus. Nobody likes to raise taxes. And so that I – I would be misleading you if I said there’s going to be a vat door. There will be, I'm quite sure, at least I would favor this, an increase in – for people making more than 250,000 bucks a year. I would suggest that that’s – that’s the President’s suggestion. We’re going to adopt that I'm pretty sure.

YOUNG: An income tax increase.

STARK: I think so.

YOUNG: So but is it your – other than that, I suppose, which – which I think it’s maybe fair to say there’s something on the agenda irrespective of health care.

STARK: Yes.

YOUNG: Is it your goal and do you think it’s attainable to finance the bill at the end of the process without additional taxes.

STARK: I don't know. I don't know. I mean, again, when you say taxes, you're getting – leading me off into the issue of income taxes, vat taxes. If you're saying within the system, do you call the pay or play a tax or a fee. We think we can do it within the context of the bill. OK? Are we going to have to add 10 cents a can of soda pop?

YOUNG: (INAUDIBLE).

STARK: People have raised that. I don't know. My kids would scream. I don’t drink enough soda pops, so 10 cents a can doesn't make any difference. But it raises a lot of money. Would I object? Would your viewers? I don't know, 10 cents a can for soda pop. It probably make our kids a little less pudgy and raise a lot of money. So I – all of those things are possible, none of them really have been established. And that’s really step two.

The first thing we’ve got to do is decide in this draft bill what will be there. And after the hearing, which we’re going to hear, as I say, from the providers, the beneficiaries, and – we will hear a lot of complaints and hopefully a lot of support. When we come back to work, put the bill together, try to finalize the language, get the final costs, and then we’ll probably have to revise it again. So this is – it’s not a simple process.

WAYNE: We talked about why providers and doctors might support this bill. They'll have higher volume in their businesses. Why would other businesses support this bill, people who employ American workers and are looking at a bill that might be …

STARK: Because, you know, a whole lot of businesses do the right thing, and like to, like to have happy and healthy employees. I think not …

WAYNE: That sounds kind of idealistic.

STARK: I know it does. The thing – a couple years ago when everybody was complaining that Wal-Mart was dumping their employees on Medicaid ...

WAYNE: Right.

STARK: ... what are they doing now?

WAYNE: They're having …

STARK: They're having – why? Because public opinion kind of said let’s do it. And their employees are happier. Even at a time when they probably have four applicants for every job. I mean, this is not a – exactly a buyer’s market. And so there are many businesses that want to do the right thing. And, yes, I believe that.

WAYNE: Do think those businesses are represented by lobbyists in Washington, though?

STARK: Oh, indeed. Indeed I do. And so that I – I think that – there are some at some point who are going to say, wait a minute, I can’t afford this or I'm going to ask my employees to go in. But then all the employees have to go in. You know, if the boss can’t take the Cadillac plan and kick the other employees out. But basically – and I think you'll find this among small businesses. They'd like to do it for their employees. Can’t afford it. Hopefully under this plan they'll be able to.

SCULLY: Congressman, you had your own experience with your own illness earlier this year and seeing the health care up close and personal. What did you see, what did you learn?

STARK: Well, I learned that Johns Hopkins Hospital is one of the preeminent medical delivery systems in the country. I had a bout with pneumonia, which kept me in the hospital a couple weeks. Cost the Blue Cross insurance company probably north of $100,000, which they paid for, thank them very much. And – but the system works. And I was relatively assured by Hopkins that had I not had my federal employees Blue Cross plan I would have been treated quite a bit the same.

And so what I'm hoping is that we can have centers of excellence like that around the country and you won’t have to be a member of Congress with a federal employees benefit plan, which you and the other tax payers, thank you very much, pay three quarters of for me and I pay the other quarter for me and my family. But I want to tell you, it’s a real relief when somebody gets whacked with a bill of over 100 grand and they weren’t, you know two weeks before they were inaugurating President Obama and feeling pretty good and then started to cough and the doc says you've got pneumonia, go to the hospital.

I never had pneumonia before. I had never spent so much time in a hospital before. And the food’s lousy. But other than that, the care was fantastic. It was team care. I still don't know what it was. It was pneumonia and they're not sure. But I'm better. And so that – but it’s evidence – the x-rays, the drugs, the – they did a – they looked inside your lung and took – I mean, it’s a complicated, complex time. And I just – I'm very thankful that they had the good professionals they had.

SCULLY: And so in our remaining minute, do you worry at all the regulation that will be part of this bill will stifle that excellence that you just …

STARK: Absolutely not. As a matter of fact, it will increase it. Under – the way we are going to reimburse physicians, we create a new concept called accountability – ACO, it’s accountability some things – where we are encouraging physician groups to come together and be more efficient in delivering care through multi-disciplinary physicians, perhaps including hospitals. There are10 experiments around the country now. The physicians get to share in the saving – or the group gets to share in the savings. And that won’t be deducted from other physician reimbursement. So we think that’s a new step in the reimbursement of physicians that – so far the AMA has endorsed – and they will proceed with that. The AMA won’t have their cut, which is why I suspect they will help us with this bill.

SCULLY: Congressman Pete Stark, Democrat of California, member of the House Ways and Means Committee, thanks for joining us.

STARK: Go in good health. Thank you very much.

SCULLY: We continue the conversation here on Newsmakers with Jeffrey Young, health care reporter for The Hill Newspaper, and Alex Wayne, of CQPolitics.com.

Let me go back to the issue of how this is all going to be paid for. What did you learn?

WAYNE: Well, I – the first thing is that I don't - I would bet the over on a trillion dollars over 10 years on this bill despite what the Congressman said. He’s got a – they've got a large program of subsidies for people to buy insurance. They have a big expansion of Medicaid, they have a lot of improvements to Medicare. It’s an expensive bill. And I would say it’s going to be over a trillion dollars. And I think we’ve heard that they're still struggling with ways to pay for it.

YOUNG: And if I could continue that point. I mean, that guess in a way is substantiated by what’s already happening on the Senate side. You know, the pieces of legislation aren’t the same, but two different Senate committees have been communicating with the Congressional Budget Office to try to figure out how much it’s going to cost them to cover everybody. And there are some other expenses, too, but I think that’s safe to say that most of the money is going toward an expanding coverage to the you know, at least some portion of the 40-something million people who don't have insurance. Those scores are coming back at more than a trillion dollars. So – and – on the cost side of it, I can’t imagine the House bill would cost less than that.

Now, they may have – they may write deeper cuts to Medicare and Medicaid providers in other areas that would bring down the price tag. But the new spending for the new programs has still got to be more than a trillion dollars. Hopefully that makes sense.

SCULLY: With all that’s been happening over the last couple of weeks, and really this past week, has the momentum changed or shifted in any way in terms of health care legislation.

WAYNE: I guess we saw a poll earlier this week that said while people still like Obama a whole lot personally, they're starting to maybe get a little suspicious of this policies. And I – and I think when we get into these questions about this – how much this bill is going to cost and what people are going to have to pay for it, that’s when you start affecting support.

YOUNG: Yes, I think that’s true. I mean, you know, the one thing – and the President has tried to emphasize this rhetorically. And you could argue in the structure of the – you know the plan that he campaigned on, which is what these Democrats in the House based their bill on. And they're doing it likewise in the Senate for the most part. Trying to – trying to emphasize to middle class voters, people who have health insurance already, this will be good for you, too. Congressman Stark went into that a little bit earlier on the program.

But one of the mistakes that Democrats think was made during the Clinton years when they tried to reform health care is that they focused on the uninsured, not on the insured who want their coverage to be better and their premiums to be lower and their out of pocket expenses to be lower. If you can’t persuade those people that this will be good for them, they're going to be against it, especially if, as Alex was saying, through one means or another they're being asked to help to pay to provide coverage to other people. Because as I’ve heard said before, altruism is not a good political strategy.

So if middle class voters are being asked to pay a tax on the health benefits that they get from their employer, if they're being asked to pay a tax on a can of soda, or any of these things, and they – and they perceive that that money is only going to provide insurance to other people, they're not going to like it.

SCULLY: Let me go back to the politics of all of this. Are there members, either Democrats or Republicans, House or Senate, that you look at and say if he or she supports or opposes this bill, that tells me something. And if so, who are these …

WAYNE: I think in the Senate probably the bellwether is Olympia Snow, of Maine. She’s very closely involved in talks with the chairman of the Finance Committee over there trying to craft a bipartisan bill. She’s a Republican and she’s probably the most likely Republican to support any Democratic health overhaul. And in the House, there is a guy named Jim Cooper, I guess. I would single him out.

SCULLY: Of Tennessee?

WAYNE: Yes. He was kind of infamous during the debate on Clinton’s plan in the early 90s. He was one of the first Democrats to come out and highlight some problems he felt were in the plan. He’s already kind of making some noise now about how he wants the bill to be bipartisan. He has certain requirements that he wants to for this government-run plan that they're going to create. He has certain requirements he wants that to follow. And it’s not clear yet whether they're going to follow those guidelines or not.

SCULLY: And, finally, Jeff Young, hearings will begin this week and next week. And then what?

YOUNG: Well, the House will do hearings this coming week all week long in all three committees. So I don't know how I'm going to keep track of all that. Then Congress leaves for a week and goes home. And we’ll see what they hear from their constituents. We’ll see if interest groups are running ads back there to try and persuade people. But when they come back after the Fourth of July, in the House they've promised – the speaker stood next to the President at the White House and said they're going to pass their bill by July 31. And in spite of all the unanswered questions that Congressman Stark talked about how exactly do you piece the bill together and how do you pay for it, the House – the House being the House, they can – when they have a bill, they can essentially do whatever they like, because the majority rules are very strong there. So, you know, we can expect, unless there is a collapse, that the House will meet that deadline and have their version of the bill passed by the end of July.

The Senate had initially set the same time table, but the Senate takes longer to do things and they've ran into a few snags on financing and trying to get agreements, not just with the Republicans, which they're not really even trying to do in the House very much, but even among Democrats over in the Senate. So that could slip. And what the President apparently told members of Congress at the White House a few weeks ago, he wants something he can sign by the middle of October. It’s a very ambitious goal.

SCULLY: Gentlemen, thank you both for being with us this week on CSPAN’s Newsmakers program.

YOUNG: It’s my pleasure.

SCULLY: Appreciate your time.

END