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Sebelius Assesses Prospects for Medicare’s Money Problems, Health Care Reform

May 12, 2009 at 6:10 PM EDT
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Health and Human Services Secretary Kathleen Sebelius explains how the Obama administration is approaching its plans to reform the health care system and address Medicare's mounting funding woes.
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TRANSCRIPT

GWEN IFILL: Secretary Sebelius, welcome to Washington and welcome to the NewsHour.

KATHLEEN SEBELIUS, Health and Human Services secretary: Thanks. Good to be with you.

GWEN IFILL: In your new position, you’re in charge of Medicare, which we reported today is going to go bankrupt even sooner than it had been expected, by 2017. What do you plan to do about that? What do you and this administration plan to do about that?

KATHLEEN SEBELIUS: Well, I think, Gwen, that fixing the health care system is part of fixing Medicare. This president is absolutely committed to making sure that seniors and disabled Americans who rely on Medicare for health benefits continue to receive those essential services. So he’s going to do whatever it takes to make sure that the program continues on into the future.

Having said that, what we know is we need to lower costs not only of Medicare, but of all health programs for businesses and families and individuals and government agencies. And that’s why health reform is so important to work with Congress and get it passed this year.

GWEN IFILL: Let me get something clear. Is it — you say you need Congress to step up and work with you. Is this plan, if we should ever see a health care plan, going to come from Congress or from you, from the administration?

KATHLEEN SEBELIUS: Well, it’s a combination of both. The president has put forward some principles, that all Americans should have affordable, available coverage, that we need to make sure people can choose their doctors and their health plans, that we build on the current system and not start all over again, that we lower costs overall.

He is committed to helping families of four save at least $2,500 a family. And that’s part of the plan going forward, and that we begin to transform the system from a sickness system to a wellness system, that we put money for prevention and wellness.

He put those proposals forward, put about $600 billion-plus in his budget proposals for 2010 as a down payment. And now Congress is engaged in a very bipartisan fashion in both the House and the Senate working around those principles to fashion some legislative specifics.

But I think it’s a combined activity of both Congress being empowered and engaged and the president moving this initiative forward with the American people.

Exploring the public plan option

Secretary Kathleen Sebelius
Health and Human Services
The president supports a public plan option as part of the health exchange. And, frankly, it's been criticized by some opponents as being unfair, an un-level playing field. And I've got to tell you, nothing could be further from the truth.

GWEN IFILL: OK. So if this is a combined activity and some members of Congress, including Democrats, have said part of the solution is to come up with a public-run program which would at the very least create some sort of competition for private insurers...

KATHLEEN SEBELIUS: That's right.

GWEN IFILL: ... is that something that is on the table for this administration?

KATHLEEN SEBELIUS: Oh, I think it's very much on the table. The president supports a public plan option as part of the health exchange. And, frankly, it's been criticized by some opponents as being unfair, an un-level playing field.

And I've got to tell you, nothing could be further from the truth. In most state employee benefit plans run by governments across the state, including my own home state of Kansas, a public plan and a private plan exist side by side and give state employees more choices.

A number of the Children's Health Insurance Programs have a public component and a private component. Again, more choice, more competition to keep costs lower and to make sure that individuals have a choice of plans and doctors and benefits.

And I think that's an important factor as we move into making sure all Americans have affordable, available coverage.

GWEN IFILL: If you talk about all Americans having affordable and available coverage, how many of the roughly 47 million uninsured will be affected or will see health care more available to them because of the kinds of cost-trimming that you suggested, for instance, yesterday in meeting with these companies?

KATHLEEN SEBELIUS: Well, I think there's no question that whether you have current coverage and you're worried about losing it tomorrow or the next day because your employer may not be able to afford it any longer, or you're paying higher and higher out-of-pocket costs and not sure that next month or next year that's going to be available, or you've just lost your job, and along with your job goes your health insurance, all those Americans right now are in precarious states.

But in addition are the 47 million people who come through the doors of emergency room, get less effective, more expensive care. And, frankly, Gwen, that's part of the Medicare costs that we're seeing.

If we provide insurance coverage to all Americans when they enter the Medicare system at age 65, they'll actually be in healthier condition than they are now. If they haven't had insurance coverage and suddenly hit a plan where they can access benefits, their costs are higher. They're in more serious condition. They're often suffering from chronic conditions.

So addressing wellness and prevention, getting every American a health home, really does in the long term lower costs for everybody.

Funding the new initiatives

Secretary Kathleen Sebelius
Health and Human Services
While some people dismissed the revenue options as not being very popular, what I'm finding is a visit with senators and congressmen and women is they're just beginning to really assess what is their preference to pay for health care.

GWEN IFILL: How much of paying for this will come by raising taxes for people who have more generous health care insurance?

KATHLEEN SEBELIUS: Well, I think that the good news for those people who have health benefits right now is a portion of every health care dollar that they're spending pays for the additional costs of those who have no insurance.

So there's kind of the hidden tax that is calculated to be 10, 15, sometimes 20 cents of every health care dollar, where those with insurance, like me and my family, pay more to visit a hospital, pay more for drugs because we're in part compensating for those who have no coverage.

So bringing everyone into the system and, again, driving wellness and prevention, fixing some of the problems with the system that focus on the end-of-life issues and chronic care when we can take better care of chronic diseases at an earlier point and have not only a higher value of life, but have more positive outcomes for patients, there's a lot we can do in transforming the system that will be good for Americans.

GWEN IFILL: But in terms of your goal of trying to get health care reform passed and enacted this year, are there any revenue options which have been put on the table by this administration so far, including the one we just referenced, which have gained any traction at all on Capitol Hill so far?

KATHLEEN SEBELIUS: Well, I think the reality, Gwen, is that Congress is just beginning to engage in the specifics. And the president, as you know, put over $300 billion worth of savings, ways that we can find efficiencies and better health outcomes in the Medicare program, and also $300 billion worth of revenue.

And I think that, while some people dismissed the revenue options as not being very popular, what I'm finding is a visit with senators and congressmen and women is they're just beginning to really assess what is their preference to pay for health care.

Everybody knows that we're going to have to find a strategy where everyone has some responsibility. And there are a lot of options on the table. And I just look forward to working with the House and the Senate as we move forward and identifying the specifics and the cost-benefit analysis.

Chances for passing legislation

Secretary Kathleen Sebelius
Health and Human Services
It really isn't an option to fail, because the recovery of the economy depends on transforming the health care system and fixing health care. And I'm confident we'll get it done this year.

GWEN IFILL: Tom Daschle, who, as you know, is the former Senate majority leader, minority leader, who also was in line for the job you have now gave an interview recently in which he said he put the chances for passage this year at 50-50. Where would you peg it?

KATHLEEN SEBELIUS: Well, I'm maybe slightly more optimistic than that. I don't ever underestimate the power and voice of the president of the United States, particularly this president, who has made health care his No. 1 domestic priority.

And he has made it very clear to all of us on his team, but also to the health industry stakeholders who were in the office yesterday, the business community who was in the office today, to consumers across the country, to friends and allies, Republicans and Democrats, that this is our No. 1 priority.

And it really isn't an option to fail, because the recovery of the economy depends on transforming the health care system and fixing health care. And I'm confident we'll get it done this year.

GWEN IFILL: So if you're slightly more optimistic, does that put you at 60-40?

KATHLEEN SEBELIUS: Oh, I'd do 75-25.

GWEN IFILL: All right. Well, we'll leave it at that very much. Health Secretary Kathleen Sebelius, thank you very much.

KATHLEEN SEBELIUS: Thanks, Gwen.