Them live you on cspan2. In fact, there are states, maybe a dozen to 15 states particularly in rural rural areas that have competition problems and too ticket for peoe that oversee subsidies with rate increases. Thats a public title thinking whatever such a just or have suggested that this law doesnt have challenges. The next level of challenge. Dr. Burgess is right, you need a cooperative spirit to fix the things you begin. You can talk about why that is and i talked earlier about some of the things that but after that, including the defendant of some of things that were in the original law. But the fact is where we are now today requires some surgical focus, surgical solutions. So what would i do administratively . First of all, very good news, s p just cannot with a report which said that those rate increases were one time and people are beginning to move back in the market. I think thats very good news. Cbo confirmed that. People filed their 2060 number switch i look at very, very closely. I came from the private sector before in the government. The first reports were very favorable. Blue cross in florida had 75 , hcfc which had lost the most money has definitely better, about a 20 point improvement. I will continue to make adjustments. I think the idea that one of the ideas thats in this pet alike is the the funding pool for states pick because i think if states put in place targeted reinsurance tools or spend it in different ways as a soffit to really bring the subsidy levels of to the middle income levels, i think i would really be the best surgical approach to the challenge. And a moment of agreement, a consensus, because what we call, that Patient Safety and stabilation fund can use to be the innovation fund, that at one time i champion it with a 25 billion amount are actually in the bill was passed to our committee was at 100 billion, 15 billion for the first two years and then ten for the remainder of the ten year cycle. Of all of the things that when i look forward to what could be different, i spent the month of december talking to my counterparts in the State Government, my statements and state senators. The message i wanted to convey to them was i want to be for what you are for. I dont want to come down here and tell you what you got. I want you to tell me what to fight for. So yes, we had the discussion about block grants and per capita allotment but this concept of being able for the state being able to participate once again in what used to be called interest goals a risk pools, the hybridization about a reinsurance plan and the risk pool, where private individual Insurance Market was on the roast because of not even because of the Affordable Care act but because of guaranteed issues of decision back in the 90s, now the market was reinvigorated not because the Affordable Care act, not because of anything we have done but by taking their own premium dollars assessment on beneficiaries. Older individuals by 7000 for the year for premiums and i think thats exactly the type of solution i want my states to look at. I taken that even say a diagnostic test from other diagnostic categories out of the risk pool. Is there a way to provide a benefit in the fact were providing additional federal dollars to do that. I dont see that as a bad thing. Youre exactly right. When it comes to Insurance Market rules, we can have a debate about the best approaches, the fundamentally there are solutions. I would argue that having subsidies for a variety of reasons. Dr. Burgess might argue that its better, the fundamentally thats not the headline of this legislation. Thats one of the most minor things. Unfortunately, the headline this legislation is 25 of the Medicaid Program and a caffeine of the program forever. In return, a very significant tax cut for industries and individuals. You will have different views about whether thats a good idea or bad idea. Weve never had that debate of the country. He had an election about repeal and replace. I can acknowledge that. I can say this as someone whos very personally invested in the Medicaid Program for a variety of reasons is a very significant change to the way medicaid works. Its a very significant change in the commitment to medicaid and i dont know that in all the time we spent talking about the aca, thats an unfair time. That is something that doctors and hospitals and governors have a lot of doubt. If the senate does moderate the villain straight back medicaid provisions, could you get that type of bill through the house . Its a too hothetical. I could deal with what i have to deal with right now which is a bill that clasped in that Commerce Committee and that is until i was like to see us then over to the senate. But they do with it is obviously up to the greatest deliberative body in the world and see what we can do with what they come up with. I do, since administrator slavitt brought up the scope of it, one of the headline from yesterday was that confidence in the economy is higher now than it has been since i first started in congress in 2003. There are a lot of things that can be done if you have an economy growing between 2 and 4 as opposed as 1 to 2 where it is the last eight years. We are coming up against the mother of all debt limit battles. If we got these problems now a medicaid system and deal with them now, maybe we wont see them having to be dealt with and whatever happens with budgetcutting when the debt limit has to be extended whenever that happens. April, may, june, july. That is not something you push off to the next 10 years. That is happening this year. All of these things are occurring. Ill just tell you. I dont know if ive seen a time with her so much activity on so many Different Levels in the United States congress. We have this ahead of us now. Weve got to find the last fiscal year because the continuing resolution is about to retire. We do have the aforementioned debt limit for the next fiscal year or we have to do all the appropriations through may, june and july that we have not done before in this administration has been committed to doing this. There is no shortage of fiscal and Financial Decisions that have to be made in the very near term. Im not talking about your story down the road. They cannot spin kick down the road stops here. Of health caris rimonious, it would be harder to do something with other issues dealing with the debt limit,ll of these different things. You cant deal with tax reform also for procedural reasons until you deal with health care. I dont understand that, but youre right. In some ways they think its good to have a Health Care Debate separate and apart from Everything Else thats going to be happening. There will be so much competition for airtime, for intellectual bandwidth, for people on the committees fish is not a bad thing we are getting this done early in this congress. Circling back to the administrative actions, what exactly would you like to see dr. Price do . Hes put forward a packet of smaller adjustments to stabilize the market. What other things or anything else might you be interested in . If you asked me this question last week and i wouldve said the secretary price and no cms administrator seema verma said on monday, telling dave we want you to look into the possibility of where the waiver can be helpful to you. Or my state been focused on the waiver of concern the previous was not going to extend. Let me explain for anyone watching on cspan that these flavors are something in the Health Care Law that allows state to take a different approach to help reform if they meet different guidelines. The 15 waivers in the Social Security act. Different places and different reams of federal law. This flexibility and secretary price as seema verma put forward is exactly what i would like to see. I know what i hear from my folks. You normally dont use the words exciting and Health Policy together in the senate. One of the most exciting days and Health Policies ive ever seen was the day before and i duration they appeared there is a roundtable and then we had a roundtable that commerce on the house side. The enthusiasm was anxious. They are anxious to be able to do some of the things we have been talking about. Is there really cms has an office in baltimore. So every governor described go into this office in baltimore. Bill talked about the same chair they had to sit in to have their waiver denied. So they are anxious to not have to come to washington. They are anxious to be able being a republican state that out of waiver denied by me. The sentiment was significant around that table. We will talk about that because i want to be clear and its important to me that the republican state, we granted a lot. We did as much flexibility and im sure they will do even more. But thats important point to me. Again, i dont want to out anyone sitting next to me in that meeting. But heres the deal and the question was asked by one of the governors. If theres a waiver approved for one say, why can i not become applicable to oth states and other states, cod go through the entire process. I agree with you. Again, the flexibility that secretary price has underscored in his letter that he put out monday is exactly the type of action i want to see from the administrator site. Some of the states looking at that include oklahoma and kentucky. Trying to the work requirements and other things in their program. Im sure that will probably be approved. Just come in the Kentucky Governor was there another certainly 11 of the issues talked about on his path. The third pillar you all talked about, House Majority leader Kevin Mccarthy said there would be for those from elsewhere soon that would kill but the other basket of changes you want. Association health plans, medical practice, not huge bills compared to the context. Medical Liability Reform. Words matter. Yeah, okay. Are there other things you would like to see as part of the third prong . Well, just in a Broad Perspective on a thing back on the 14 or 15 years ive been in congress, had seen at least three major pieces of Health Care Legislation come through. When i was a freshman, aca in 2009, 2010. Medical access, reauthorization act in 2015. Those things that tend to have high in both houses of congress on both sides of the political divide seem to be worn during and while people argue is kept open too long and was a bit anyway bipartisan. The then president of the United States and committee senator kennedy agreed they wanted to get this done. When it was done, as those implemented there were some tough days with implementation of part d in january 1st 2006 i cant tell you a number of pharmacists who said i want to listen to the same music im listening to at 1800 medicare because ive been on hold for hours and im not sure im getting the call is answered. The concern was they were filling prescriptions for medicare patients. They were sure if they were filling those prescriptions that they would in fact be reimbursed. To secretary levins credit, they did take care of that. In pretty short order. We are all familiar with the problems with the Affordable Care act, the website of the early days. Harder to get done because no republican had voted for that. Why would i want to leave my fingerprints at the scene of the crime . I wasnt there when this was created. Medicare access and chip reauthorization of both houses of congress can play a role. The proposed rule cannot in june of last year. I got a lot of phone calls he was good enough to take my phone call spirit phone call spirit after it cut the phone calls they worked on a card. Credits are done for the amount of work that theyve put in to create the flexibility that came out of the rule in october. Im sure this has happened before, but ive never seen it when he told me youre going to leave the comment period. Open because they were good ideas continuing to come in. A very positive step. The demonstration when things have investments from both houses of congress and the sides of the political divide, the American People actually benefit from that. These things that come forward that later mccarthy talked about last night are those kinds of things. Youve got to get it or nine senators to vote for those. Those are regular order things that have to come through regular order. I would argue that will be more enduring policy that comes out of the third act. One last session i will have to wrap it up. It could not cut much attention and we have to do that by september 30th. Its not supposed it. It was funded until the end of the fiscal year, which is september 30th. Something has to happen. Obviously we are going to get through this stuff first. We have user Fee Agreement on an fta users the agreements that come through our subcommittee immediately thereafter and state Health Insurance is one of those things immediately on the radar screen as we go forward this year. There is no shortage of Big Health Care things that have to pass the committee. Absolutely true. Thank you for joining us. We really appreciate it. Im sure that other people may have a question or two as iraq at the door, that thank you very much. [applause] thanks very much. Our next panel we will get underway very promptly here. It is about repeal and replace with what . Weve got a little bit larger Panel Moderated by aaron mershon, one of our Staff Writers that specializes in health care cq rollcall. Bill cassidy is a republican senator from louisiana and has authored his own repeal and replace legislation. Joe barton is a republican congressman from texas, former chairman of the energy Commerce Committee, David Merritt is executive Vice President for Public Affairs and strategies that americas Health Insurance plans and clay is the principal atlantic partners. You may have heard michael leavitts name spoken just recently. The former hhs secretary during the george w. Bush administration. Thank you very much. Thank you for being here today. I think weveot a fantastic panel to set up the politics about repeal and replace. Obviously a busy time. I think we are waiting for just a moment for congressman barton. Unfortunately, dr. Mark mcclellan couldnt make it today. Obviously a lot to talk about, so i do want to jump right in. Its been a very busy time in washington for those of us who work in Health Policy. Only a week ago House Republican leadership put out their legislative text of their replacement plan and of course on monday cut its cbos quirky shows 24 Million People could lose their Health Insurance coverage under that plan. As far as they now come the speaker ryan said he still planning to bring this to the floor for a vote next week. A very timely panel and im excited to jump in. The first question is probably the burning questions on the minds of most of us here and that is can this thing passed the house . Dr. Cassidy, doing a start . Well, clearly on the b. Team in the house. Though, there is a delay. Clearly they are working through it. If the speaker likes to say, theres two more committees to go through. Im concerned on the senate side. I kind of know these are my patients. The current structure in which someone whos six years old working 20,000 a year doesnt get an adequate plan to help him or her by their insurance. Im sure thats one of the concerns on the house side. I think there is a path forward, but we will do some things on the senate side. The opportunity to speak on the medicaid site as well. There have been concerns expressed from the Freedom Caucus andther members regarding the lack of work requirements, starting the 2020 days, moving that earlier pending the match were the expansion population. Looking at the calendar, from my understanding they still intend to move forward next week and there is the idea that they can make changes to improve the bill, which is part of the process, the legislative process. What you see right now is the sausage making process in the public. What they are trying to do on the republican side is improve the bill. That is a good thing for everything everyone trying to undertake an exercise. David come into any give your take . You cant Talk Health Care without politics. We look at it as an opportunity. The individual market has been challenged for a long time. Thats why it was addressed the aca in the first place. We look at this as an opportunity to bring shortterm stability as well as longterm improvement to a market that really does mean it. We welcome the discussion and hope it can move forward. I would like to dive a little bit deeper into sort of whats on between the moderate and conservative up on the hill and hopefully mr. Barton will make it here in a minute. Lets start with you, dr. Cassidy. Fill me in. Idc at play now. As we talk about changes mentioned that maybe conservatives want changes to medicaid, moving that day when they would freeze new enrollment in the Medicaid Expansion program from 2025 to 2018. Is that something you think moderates can expect in the house . Vice versa. There are some things the tuesday group is interested in and changes to the tax credit to make them more generous for low income people, seniors. How do you find the balance between finding something that both groups can accept her . Im going to push back a little bit on how you frame the question the cars one side has a conservative approach and want a moderate approach. Conservatives are about fiscal responsibility. Whatever we come forward with must have fiscal responsibility. I just had an article i authored and put it in the hill. I said that their are three myths about obamacare, but let me tell you the truths. One, americans are already entitled to health care. Congress has established that. Two, we are going to pay for health care. Have a doctor who works in the hospital for the uninsured, as long as those doors were opened, and asthmatic, diabetic, schizophrenic, you name it came in, we treated. At the hospital for the uninsured. People said its free care. It is not free care. The guys that made the policy over here kind of acknowledge that. So the truth is, conservatives are about truth that congress has entitled folks. I give you a litany of programs that supported that is going to be paid for. The question is is it better to get coverage in which somebody is diabetes is managed as an outpatient or is it better to not get coverage and they come to the er episodically when their diabetes is out of control. I would say the conservative fiscally responsible solution is to give coverage. The only way you control costs is if you have appropriate coverage. Not the bells and whistles of obamacare driving up costs for all, making it unaffordable, but something which empowershe patient. I push back because in this case, the people you call the moderate are proposing a fiscally responsible conservative approach. I do think therell be Common Ground because i think we as the conservative party will find Common Ground. Issues that we have to come to a common understanding of the facts and i think that the process we are working through. Congressman curt thank you for joining us today. Im glad you made it. For once im later than the senate. Weve been talking a little bit about whether the house package to replace the Affordable Care act can actually pass the house. Id love to hear your perspective if you dont mind jumping in. In the house package passed the house, thats the first question. Well, weve got a lot of witnesses here, so i have to be careful what i say. You know, im part of the whidbey team and we basically the two bills that passed the energy Commerce Committee and the ways and Means Committee going to the Budget Committee today. I would have to say there are a lot of undecided nose. It depends on what the president decides to do and how strongly he decides to support the package as is. If we make changes to it, i would say we have not passed the house. Interesting. Can you fill us in on the changes that would help us get there . There is a division in the house. There is the conservative, part of and we need to strengthen the bill from. We need to restrict the Medicaid Expansion program, and it sooner. In other words, not allowed continued expansion. There should be a work requirement for the healthy adult medicaid. It doesnt eliminate the essential benefits package requirement i think those would be the three big things. Concerns about the Medicaid Expansion with medicaid and what was the third one . Thanks, clay. Restrictions are elimination. Theres not anybody how some republicans tide. It doesnt want to send the bill to senator cassidy. We were just talking a little bit about the balance between more moderate members and ill try to frame it that way. When it comes to the medicaid amendment you championed, i was speaking with members of the tuesday group last night. Congressman charlie dance the same moving that it up to 2018 was a nonstarter. They both use that same word. Im curious to hear what should say to them, how you bring them on board without effort of yours. I would explain to them what the amendment does. It doesnt take anybody currently on medicaid is a healthy adult off. It simply says in the state that expanded medicaid they cannot continue to it and healthy adult medicaid population beyond this calendar year. It doesnt take anybody off. It simply says a healthy adult Medicaid Program. The federal medicaid match which is about 58. 42. Under the expansion program, the federal government paid 100 of the cost until this year. This year is that 95 and essays is done in 90 but it seems that 90 in perpetuity. Your healthiest group on medicaid get a 90 match. Your traditional medicaid recipient in women with children , the state to pay on average 42 and feds pay on average 58 . It is not that her tony and program that some of them when it came in the house and senate why we think we have to protect a program that essentially as a bribe to the state to expand medicaid population to Young Healthy adult is beyond me. By me ask you since you did the house i say, we see more of your partner are some of the more moderate members or i only have to wait for people, which i am one in steve scully says two. It is not like im flogging. So again, we all wanted to pass. Some of us just want to improve it a little bit before we send it to the senate. There is a lot of goodwill for our leadership. We understand their dilemma and we certainly want to work with our president. Basic principles are basic principles. Youve got a senator right here. They like im going to get to him. I want to have one more question on the house because thats where a lot of action is right now. How big of a role do you think the white house is playing right now and how big of a role should they be playing to bring this thing through to the vote . I think the white house is key in interestingly, we are very fortunate in that two of the key white house intermediaries, secretary of health and Human Services tom price is the former chairman of the house Budget Committee and the director of management budget, Nick Mulvaney is one of my coaches on the Congressional Baseball Team and a key member of the house when he was in the house. Those president s used to the extent they have experienced and have it on the senate side. In this case, again the Vice President who i didnt mention cover some of their key people are house members so we have a lot of interaction, which i think speaks well for the endgame they know the rhythm of the house in the mood. And the president will be able to intervene in a way that has her resolve. Cassaday, to ask a question . The president what the campaign trail that he would continue to cover folks with the same number of folks. Preexisting conditions without mandates at a lower cost. Thats what he got elected on and repeatedly after being elected. The president is committed to the forgotten american. The folks ive suffered over the last eight years and an economy which does not work for them. If he stays true to those from the u. S. A. Will politically. Im hoping the president hangs with that. Ive got to press you on that. Cumbersome burden has been optimistic about getting this to the house eventually. Lets hear it. Will it make it through the senate and what does it look like i does that happen . Steve mcqueen of the senate will amend. Theres more concern on the senate side that coverage continues. Its hard in our country to offer folks and give them time to adjust to attend the trial. Our country is foster programs to help people get health care. Medicare, medicaid, va, tricare, different hospitals. I could go on. Theres a group that tom price called the vulnerable. They make too much to qualify for medicaid. But 15,000 a year, eyill not have the money to put up the employees contribution to concerns. The president speaks about the forgotten person or tom price about the vulnerable of those are today. I think there is concern on the senate side that those folks have the same advantage as somebody whos making 180,000 a year and paid 80 of the Health Care Costs of the tax code subsidizing the premium. Thats all an average of about 5000 in employersponsored insurance on average of about 5k. The question is are you going to get that benefit as well to folks who are lower income and thats a decision before the senate appeared we need to make sure that someone making 20,000 a year 50 years old will make insurance. Lets talk about the process. The senate will amend this thing. I think weve heard a deadline of getting this done before the april recess. How likely is that . How does that sort of bring the package together . Going to committee. Thats been said. We may have judge gorsuch in the interim. Senators are putting their amendments together. Speaking among ourselves to get support and understanding for those amendments. The house bill will come over and be amended into a conference. If we dont get it done, plan on staying over easter. The advice sharpens people mine. Congressman, what dr. Kathy s. Outline his changes that will make the bill more moderate. Do you think they can pick that back up and make it happen . We are always optimistic in the house to see the senate back to such a refreshing spectacle that if they do make changes, thats the normal process. Of course over half the senate was in the house including senator cassidy whos an excellent number and somebody served on the committee im on when he was fair. We have goodwill and we want to get this done. We hope at some point in time our friends on the democratic side to side to participate in a positive way. If that happens, well get a bill the president can sign in the American People will be much more comfortable with than they are the Affordable Care act. I want to give our panel chance to take a breath and take it over to you. What happens to the Insurance Markets in 2017 and 2018. Before i get to that, Grossman Burton remains the one they would come in. Democrats are opponents. We see that in real life here. As i said before, we are very optimistic we can actually have shortterm stability its no secret the market has been troubled for many years. We are hopeful working together collaboratively in a positive way can fix this market once and for all. The thing any Company Needs is certainty and clarity. As they been debating back and forth as time has gone on, one thing that helped plants to need his bat level of uncertainty. It is fairly well set. It is closing very rapidly for products introduced to the market in 2018. Lots of its plants have to jump through and goes into pricing and planning products for the market. There were a number of positives taken already. Both from the administration side can deliver a shortterm stability. The Term Administration you look at the proposed rule a few weeks ago. Very positive steps trying to bring certainty and stability to the market. Trying to close some of the loopholes that have been exploited and gained a little bit and gin up cts for everyone. Mimicking the Employer Market in the open enrollment period. Definitely some steps taken that were very positive. On the house side of the legislation, other positive steps the kinetic ossuary reductions. The folks at senator cassidy was talking about to earn 15,000 a year. Maybe a little bit more and they do get a subsidy. They have outofpocket costs, the cost sharing reductions reduce outofpocket costs. Thats a positive step in the legislation. Making family insurance payments from last year. Those are things that bring stability or encouragement to enter the market in 2018. Theyre a number of positive things that bring certainty and clarity in order to have more choices, more affordable Choices Starting next year. Given the sense of things youd like to see changed about the package as it is right now. Obviously more certainty. The longest the process goes on, it doesnt deliver the certainty. But then the next month or so if theres a package folks can plan on and start the process of filings with the review, we will see some positive movement. The calendar is one of the biggest concerns at this point. Some of the things we also look at it can be improved. Senator cassidy mention one of them on the tax credit side. And the house proposal was just the ageadjusted and that certainly can be effective for some. When you look at actually affording health care coverage, if you only have it on age when they actually cant afford it. And the tax credit based on age to cover a policy they choose. Theres improvement rather ageadjusted but in a component to it. They deliver the resources they used to purchase effective coverage. One of the things he said that i dont think too many people realize, we had an election this past november and all republicans i think without exception promise that if they wanted we control the government that we would repeal at a minimum repeal obama to your and most of us want to replace it or reform it. When people go to vote in the president ial elections next year, their health care and cost of coverage if they have Health Insurance of the key decision to vote for in the Insurance Markets dont operate on election cycle. So the cake is pretty welloff they on what your health care and Health Care Costs if you have Health Insurance coverage is going to b the political system to operate as quickly as the consumer decisionmaking, which you go to the polls and say to my better off or worse off with the Health Care Insurance into components of the costs you and whether the plan meets your needs. Pictures Health Care Costs are going to be based on the Affordable Care act. They are not based on all these reforms and things that we are working on right now. We probably hopefully are going to have a much more affordable, much better quality access to care system for another three years or two years at the minimum and the election will intervene before that happens. There is another positive provision in the bill that can actually affect raised very quickly. The Affordable Care act originally, 110 billion in premium taxes on many, many Health Insurance plans. Small businesses can a senior on medicare. That has been delayed for a year, and the package moving through the house. That on average is an increase in premiums just on that tax alone. That can deliver shortterm benefit, but another positive tax. We repeal the requirement insurance that has to be provided. Some of the things well have an immediate effect. On a follow up with the socalled continuous coverage requirement and on this week about potentially dropping the bill and i think its important preexisting conditionth a protection. And heres the perspective that would happen if at was dropped from the package. The mandate is one of the most unpopular pieces of legislation weve seen in a long time. How effective it was to actually putting them in the market ascended the period something that is effective, others think it didnt have an impact. What we know from an insurance standpoint whether its Health Insurance, Car Insurance is that you cant have folks who just buy coverage than they actually need care. Its literally like buying Auto Insurance after youve had iraq. In order to keep costs down for everyone, you have to utilize medical care who needed a diabetic coma whatever they need it, you do have folks that have insurance to cover the costs, but in case they need to seek care at some point or thats how you balance out the risk pool to lower costs for everyone. If you have a system where folks dont have the mandate but can still sign up for coverage when they actually need it, its going to raise costs for everyone. There has to be some type of continuous coverage incentive. The 30 premium charge for not having continuous coverage is a star. We think it can be effective and help mitigate the loss of the mandate. I think we can be constructive and find solutions that really do work. We share the same goal as congressman art and that we want lower cost and better quality, more affordable and we know in order to get that we have more coverage. We think that provision is important, but we want to have a constructive dialogue on what else we need to do. Theres another way to get that by the way. Replacement plan cap go, blinking to put forward to allow states to automatically enroll folks. And the house plan, it appears as if that provision was allowed. They could say listen, all you java mortals will be enrolled in the suit called to tell them you dont want to be. Thats whats done in Medicare Part d. No one says its a mandate. A few cranky folks living under a car ahead cause up and says i dont want it. But as a rule, you do that. We had an Insurance Company model. What if we had automatic enrollment of these young immortals and they said that by itself was lower premiums by 20 , still keeping it close to or less healthy. So there is a mechanism that is both a patient freedom act. By the way, i think it was the health affairs. Org blog post and they said it should be looked at as a way to restore actuarial balance about a mandate. I wanto ask one big picture question here and take it to the audience for questions to be thinking of those. I want to think about some of the Health Reform priorities that are on a lot of republican wish list but have not made it into the house package or whatever else. Health and Human Services secretary tom price is talking about this last night for changes to the health benefit, things like that. A very long list. I want to ask at least in terms of the changes that might need congressional action, things that might need to go through regular order and get 60 votes in the senate, what are the chances for Something Like that to happen in this congress. The socalled third bucket of Health Reform care, how are we likely to see the changes there . Id be happy to. That question remains uncertain until we see the verbal affect in the senate. There were certain components of the house of legislation that arguably may not make it through. The question cant be answered until she makes the ruling. I think the administrative phase is a critical phase, especially as you see construction of the house bill. One of the key component we havent talked a lot about is one of the fundamental changes to big changthat will co about because legislation is the per capita and change to medicaid and that is something senator cassidy has been working on for a number of years, but it will require a lot of work from health and Human Services tennessee ms to implement it. That is where theres some open questions around flexibility and what could be part of this. This puzzle in order to put it together you need not only the pieces from the house legislation, but also the administrative portion as well. In terms of what happens with phase three, the issue there, the hurdle is the 60vote threshold and what actually can move through. The idea in the houses you will be voting on medical Liability Reform or wellness changes for Association Health plan. As to whether those can get through the senate, thats an open question. There are some packages that have to move through the senate and the house on the health care side as we havent talked about the chip Program Funding or the medicare extenders are rather pieces that have to move through. Those can provide vehicles for some of those changes. I think what youre going to see is the real clincher the real country repeal and replace will have to need a lot of subsequent steps to really implement this legislation into it in a way the authors really want to inflict visions around it. Senator cassidy on a side. Im not sure what i cannot do that. Obviously the essential health benefit, which would probably not be judged to raise or lower expenditures. Therefore it does not pass the role. Can we get a threshold . Lets step back a little bit. I think its fair to say theres been nothing overarching in our society that has been passed and endured as pass on a bipartisan basis. Obama carries the latest example. Ive spoken to democrats and would like them to come in and influence the product. If some did it have great leverage. So when susan and i introduced her patient freedom act, Chuck Schumer criticized it before we introduced it. Theres no way could read this because she and i have the only copies and he was already criticizing. Theres a big dynamic on their side. When i tell my colleagues is this is not about politics. Its about the patient. Its about somebody who would forget it right will have a happier, fuller life than if we dont, well have a life of decline. Thats what this is about. I hope that folks dont just sit back hoping for political advantage. Anyone else want to jump in on that . I was jumping on one quick thing. It obviously addresses a lot of things a lot of things and theres two areas it doesnt address some of the good thing. One is the Employer Market. Almost 180 Million People get their insurance through their employer. This is not to say it cant be improved. On the cost side it can be. It has been relatively stable. Weve seen historically low cost. That certainly was a positive thing. Leaving aside medicare for the moment. That means improvement in the longterm as well and better value and services, better results for seniors and taxpayers. Setting that aside for another discussion was a positive thing. The thing they attacked about, one area we can addresses the rising cost of Prescription Drugs. If you look at the headlines over the past year, just look at the consequences those costs have on families. Its enormous. Introducing more competition is really important especially when you see costs going up. Far greater than other areas in the health care system. 25 of the costs are not Prescription Drugs. We released research two weeks ago that shows the break down of the premium dollar and Prescription Drug costs now account for 22 of spending and that doesnt include Prescription Drugs dispensed in inpatient hospitals. That bucket is enormous and growing. I think there can be Bipartisan Solutions to address the rising cost of Prescription Drugs that can deliver more competiticompetiti on, more choice and hopefully lower costs. I want to comment on what senator cassidy said. For things to life they do need to be bipartisan. Hes totally right on out. Since this happened in a nine part nonpartisan very partisan way, and it almost certainly has to be changed in a partisan way. So there are many members of the house that think we ought to give the bird to the byrd rule so to speak because we just dont see a democrat senators on the site and have an epiphany. Through the good graces of senator cassidy and others, there is always that chance. We are very skeptical in the conservative wing of the house pitcher ever going to get to the third bucket so to speak or that third phase. Hopefully it will happen, but i wouldnt bet my last Health Care Premium dollar on it. I will say the statue come you can just kind of way that. That said, i also agree with what joe said. Which is that we shouldnt bank on a third party because of their work before now must be able to stand on its own. All right, without we should open it up for questions. A few minutes here. Does anyone want to jump in . I ask you introduced yourself before you jump in. My question for the legislator is when the aca was pastor when were going through that process back in the late 2000, coster farmer ben in the cost curve was one of the key discussions. The current aca bill has a lot of discussion our proposals on coverage reform, but it doesnt seem like we are addressing the actual rising medical costs for the conservative perspective. What are we doing in terms to payment programs and all the things that were in the aca to than the cost curve where you can bring it down. And we both answer . You go first. If we recreate future Health Care Market and consumer choice, that well been the cost curve because consumers will pick plans that meet their needs and that they are affordable. It is difficult to create a true transparent Health Care Market because so many people get their Health Insurance where they were. If we can create such a market, we are not doing away with individual exchanges. We are simply not making people mandatorily have to participate. If you in any way perform the essential benefits requirement, that will democrats curve of his art he then pointed out, you eliminate the taxes. That will take the cost curve down. If you eliminate the regulatory red tape doctors and providers have to contend with, the efficiency improvement within the cost curve. I am going if you will, there is at least several components. Think about medicaid first. Part of the cost rightparen medicaid is that states are incentivized to pass cost to the State Government the federal government. For example if they recover waste, fraud and abuse after rebate to the government the portion due to the government. It is a disincentive to go after waste, fraud and abuse. The hospital with the provider text uses it to drop more federal dollars. The whole provider tax and got more. The beneficiary payment is something that addresses that. Just as the state goes to a managed care company that says you get x number of dollars for someone who looks like this, the federal government goes and says you get tax plus a little bit more. There is tremendous potential in the payment. By the way, the Dubya Administration went to rhode island, gave them a block grant for longterm care and rhode island brought their costs down and improved outcomes on a block grant. Next, private insurance. First, how do we create insurance companies. We are inviting competition to return the deregulation of flexibility so that similar cost. If you have one Insurance Company, coster galena. Secondly, we have to lower the cost of health care itself. One thing we have on the patient freedom act is transparent. Lots of examples of how the opaqueness of the mechanism keeps power in the hands of the provider. We need ge it to the patient. One example in laser surgery, that is come down over the past 10 years as Everything Else is present. Outcomes better, lower costs because theres total price transparency. It can certainly work for a. Thats another component. I could go on but ill stop. One or two more questions. Anybody out there . Senator cassidy did see opaqueness when he was in the house. I am with the jewish federations of north america. Includes in louisiana. I wanted to dig deeper than the recent cbo score, saying that there would be a 25 cut should be the current bill goes through. Weve got grave concerns about what that means to provide rate cut as well as the impact to say. We do know of one major hospital, not unlike the one you drafted, senator whos taking up only 1 billion contract in the city of cleveland and building a new hospital. They just fear they are not going to be able to make their ends meet. Can you talk about what per capita cap might need and provide the economic effect for the nation . To speak a little bit about the Medicaid Expansion. Bbravo plan getting about 4200 to subsidize their care on average. Untraditional medicaid, about 4000 these are the sicker patients. Under the medicaid advantage of people cost reports of managed care companies, they were about 6000 in this coming year 6300. So on the medicaid the Medicaid Expansion programs, if you do apples and apples, 35yearold blue cross, 35yearold Medicaid Expansion, in the managed Care Organizations are getting that 107 of the 100 actuarial value clue crossbows need. Let me repeat that. On the Medicaid Expansion, look at the sec filing, ncos are getting about 107 of what a blue cross 100 actuarial data on trade value at cost. They are paying medicaid race at the medicaid provider panel. Getting 107 have an actuarial blue cross power. If you speak to me about the rate, i will tell you for traditional medicaid it provides a lowcost, dis incentivizing, eliminating their ability to see such a patient, that by the way parenthetically, that is a problem with the states. There is one state i know of, i think illinois. That actually pays hospitals in such a way to incentivized hospitalization. Now that is wrong. So if you will come in the way to correct that is the beneficiary payment. The state of illinois doesnt have the ability to pass cost to the federal government, rather they get a budget and figure out is cheaper in energy treat them as an outpatient and hospitalized. Lets look at the Medicaid Expansion. There is a lot of room to actually lower costs and preserve care. If it doesnt preserve care, its not the fault of the federal taxpayer are right now pays 107 in a blue cross policy. The regulator is not looking at that contract in reshaping it to the advantage of the patient. I think you also have to make sure you define what a cut is. The house per capita cap for medicaid increases spending to the states, increases funding, but its not unlimited like the current system. So that cut if you do with the house stared and becomes law, states get more money, more flexibility, but it doesnt go up unlimited like it does under the current system. Its really more money. I hate to cut it off the way of fantastic Panel Moderated by my colleagues we can get warranty details there. Thank you for being here and thank you for watching. Thanks again. [applause] thank you, nel. We have builtin a 15 minute networking break. Will take you live to the Longworth House Office building on capitol hill. The house Budget Committee this morning to mark up the Republican Health care plan that was passed out of Committee Last week after overnight sessions from the energy and Commerce Committees, ways and Means Committee last week. The session with the house Budget Committee expected to run throughout the afternoon. Cq writes republican for democrats on the committee agreed each side can offer a set offers seven motions on the market. These will not be amendments. Instead they would direct budget chairman diane black of tennessee when the legislation