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Sebelius: Health Reform Misinformation Persists; Medicare Solvency Now Stronger

August 2, 2010 at 12:00 AM EDT
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With more measures from the health care reform law set to take effect, more states are filing legal challenges as well. Judy Woodruff talks to Health and Human Services Secretary Kathleen Sebelius for more on the latest health care reform developments and what consumers may see next.

BETTY ANN BOWSER: It’s been just over four months since President Obama signed the health reform bill into law. But it remains under attack across much of the country.

At least 20 more states are now challenging the constitutionality of the new law, either in court or on the ballot. In Virginia today, a federal judge allowed the first lawsuit to go forward by denying a motion from the Justice Department to dismiss a case filed by the state’s attorney general. It argues the law is unconstitutional because it requires most Americans to buy insurance.

Tomorrow, voters in Missouri will decide whether to pass Referendum C, which would make it against the law to require people to buy insurance.

For its part, Democrats and the Obama administration are trying to persuade Americans that health care reform will be a major improvement.

WOMAN: How are you this morning?

BETTY ANN BOWSER: The latest announcement, a new report that says the law will save Medicare $8 billion over the next few years and $575 billion over the rest of the decade.

So far, some portions of the law are already taking effect or will begin to do so this fall, including stopping insurance companies from excluding coverage for children with preexisting conditions, allowing young people to stay on their parents’ insurance until age 26, giving $250 rebate checks to seniors to buy prescription drugs, and issuing new rules to allow people to appeal claims that have been denied by insurance companies.

By 2014, the administration says it expects 26 million more Americans to have insurance. Much information about the law’s impact can be found on HHS’ new Web site. And, last week, the president touted the law’s benefits.

President of the United States BARACK OBAMA: That’s why we passed this reform, to put Americans in control of their health care. No matter your age or situation, there’s something for everyone at

MAN: We have looked at your blood pressure today, and it is great.

BETTY ANN BOWSER: But there still is plenty of resistance and skepticism.

WOMAN: Lift it up again straight.

BETTY ANN BOWSER: Polls show many Americans are wary or opposed to the law, although numbers have slightly improved. Heading into the midterm elections, Republicans are arguing that many Americans don’t like the law.

This was Senate Minority Leader Mitch McConnell last week at an event in Kentucky.

SEN. MITCH MCCONNELL (R-KY), Minority Leader: We jammed health care through on a totally partisan basis, in spite of widespread public outrage. So, there’s a serious and sustained disconnect between some in Washington and the rest of the country on issues that have a major impact on people’s lives.

BETTY ANN BOWSER: Republicans are hoping to keep health care reform front and center. And they say, if they pick up enough seats, they will push for repeal of the legislation.

JUDY WOODRUFF: We take a closer look now at these developments and the battle over the law with the secretary of health and human services, Kathleen Sebelius.

Madam Secretary, thank you for being with us.

U.S. Health and Human Services Secretary KATHLEEN SEBELIUS,: Good to be with you, Judy.

JUDY WOODRUFF: So, four months in after the law passed, and still such vehement opposition out there. Half the states are trying to repeal this in one form or another. How do you explain this?

KATHLEEN SEBELIUS: Well, I think, first of all, this has been a long and very partisan debate, full of lots of misinformation.

So, there are a lot of people who still don’t know what’s in the law, don’t know what exactly it means to them and their families. And what we’re trying to do is actually get information, get some tools, as the president said, whether it’s the new Web site,, which is really pretty dazzling — it gives people information that they have never had before in one place — or, you know, mailing information to seniors.

Once people know what the law means to them and their families, that their adult child stays on their plan, or that no longer will a child with a preexisting condition be able to be kicked out of an insurance plan by insurers, they become much more enthusiastic about what actually the Affordable Care Act does.

JUDY WOODRUFF: Well, I want to ask you about that, because the president did say that in the run-up to the passage of this legislation. He said, once people knows what’s in here, they are going to like it.

But the polls still show, yes, there is some more support, but over 50 percent of seniors still say they are disappointed in this law.

KATHLEEN SEBELIUS: Well, when you think about what happened to seniors during the course of this debate, it borders on outrageous.

Senior, I would say, were really targeted with a whole series of misinformed statements that were designed to scare them about the law, to get them to actually call on their members of Congress and Senate to stop it, starting with everything from death panels, which still most seniors think are part of the Affordable Care Act.

JUDY WOODRUFF: Is that right? Most seniors still think that?

KATHLEEN SEBELIUS: Absolutely. The recent polling says that seniors think this actually was passed into law. Seniors think that there is a change in their guaranteed benefits under Medicare.

Nothing could be further from the truth. The guaranteed benefits are not only stronger than ever. We’re going after fraud and abuse in a way that has never been focused on. And the Medicare solvency is much stronger than it was before the law was passed.

JUDY WOODRUFF: Well, I want to ask you about that in a minute. But today’s ruling by a Virginia judge, saying that this — this challenge to the constitutionality of the law can go forward, what about the argument that is being made that it’s not constitutional to tell people they must buy health insurance?

KATHLEEN SEBELIUS: Well, I think, when you think about it, Judy, first of all, it’s not a surprise that the ruling came today.

I mean, what it basically does is, now there can be a debate on the merits of the case. So, it’s really a threshold argument: Did the attorney general have standing to go ahead?

JUDY WOODRUFF: What do you mean it’s not a surprise it came today?

KATHLEEN SEBELIUS: Well, I think that, being portrayed as somehow a major ruling, all the judge said is, come to court and then talk about the merits of the case.

We’re convinced that there are — strong constitutional basis for this. And the interstate commerce, which is the purview of the federal government, governing business that travels back and forth across states, when you think about health care, there is a lot of interstate commerce. A lot of the health markets are regional.

And people pay — taxpayers pay for every dollar of uncompensated care. For everyone who comes through an emergency room door, that goes on to the backs of taxpayers and lots of people who pay insurance policies and pay more for those who are uncompensated.

JUDY WOODRUFF: Well, meanwhile, you have Republicans who are saying, whatever happens in the courts, they’re going to continue to try to chip away at this legislatively. They’re going to try to deny funding for big chunks of this.

Do you ever worry that you are out there trying to defend something that’s going to be hollowed out?

KATHLEEN SEBELIUS: Well, I hope we are able to engage in a straightforward manner this fall in that debate.

I think it’s fine for Republicans to go to their constituents and tell parents who have a child under the age of 26, your son or daughter, we want to take back their right to enroll in your insurance policies. We want to make sure that insurance companies, Mr. Republican Congressman or Congresswoman, are going to be able to kick your sick child out of a plan. We want to make sure that seniors will not see their prescription drug doughnut hole closed over time.

That’s a debate I welcome and I hope that we are able to talk about. Repealing this bill means taking benefits away from lots of Americans who are really relying on this change, once and for all, to get some tools into their own hands.

JUDY WOODRUFF: On the savings that you have been talking about today that will be realized for Medicare, Republicans like Charles Grassley — you have got — and the insurance industry now saying the cuts that will come to private Medicare plans will result in huge increases in premiums for seniors, which will then force them to give up their Medicare.

KATHLEEN SEBELIUS: Well, I don’t think that’s accurate, first of all. The data shows that about a fourth of Medicare beneficiaries choose Medicare Advantage plans. We have more companies offering Medicare Advantage right now than we have ever had before. We anticipate…

JUDY WOODRUFF: These are the private…

KATHLEEN SEBELIUS: These are the private choices. So, you can either choose traditional Medicare or a Medicare Advantage plan.

But we have overpaid by about 14 percent. And everybody else in Medicare pays for that overpay — pays more for their Medicare policies, no additional health benefits to the people who choose. And all we’re saying is, gradually, over time, that overpayment should stop. We think there’s going to be plenty of choices.

JUDY WOODRUFF: And what is going to happen to those seniors who are in these plans?

KATHLEEN SEBELIUS: They will absolutely have the choice of those plans. Those plans will stay in effect. They will stay in the market.

In fact, the Centers for Medicare Services has issued a notice to companies, saying there will not be a cut next year. There will be a flat line for Medicare Advantage plans, so come in with your package of proposals. Come in with your bid.

But we think there are going to be plenty of options for seniors who want to continue in a Medicare Advantage plan.

JUDY WOODRUFF: Let me ask you about another headache out there, and that is Medicaid funding for individuals, the poor. A number of states, governors are coming to you, to the Obama administration, saying, wait a minute, this law means that we don’t have the flexibility to deal with these rising Medicaid costs. Our budgets are being stretched and strapped.

What are you saying to the states that are struggling with this right now?

KATHLEEN SEBELIUS: Well, first of all, as you know, I was one of them, until very recently, governor of a state, watching the Medicaid budget.

And this is a federal-state partnership, no question about it. I mean, the first thing we need to do is get Congress to act on the extension of the assistance for Medicaid programs across the country. That’s been pending now for months and months and months, and tonight again came a near vote in the Senate. It’s now been pushed off to Wednesday.

But that’s a huge step forward for states, to pass the FMAP, the federal matching plan. Secondly, in 2014, when the Affordable Care Act has an expanded Medicaid opportunity for lots of adults who don’t qualify, it’s paid for 100 percent by federal funds for the first four years and then gradually recedes to a 90 percent federal funding.

So, this is a huge number of people who currently are coming through the doors of emergency rooms in states. States are picking up costs for all kinds of health-related costs. And the federal government is saying, we think we should cover everyone, and we think we are going to pay for it, states, and help you in this partnership.

JUDY WOODRUFF: So many, many questions out there. And we thank you for dealing with some of them with us. Secretary Sebelius, thanks so much.