do is come up with a way to lower costs for people that already have insurance and at the same time cover every american. i think it is doable. i think the time is right. people really want to see reform, and part of the reason why i think we're going to have success with this is because of health inflation. more and more people tell me there on the individual market now, part of the small group plans, that inflation in terms of their premiums making it more and more difficult for them to buy health insurance. this is going to be a way for them to buy it at a reasonable cost, and i think it will make a big difference because right now we just have a situation that is unsustainable. more and more of our dollars of our gnp goes to health care.

host: as far as your specific committee is concerned, are you working on the cost factor, how it is implemented? guest: i think the most important thing is that there is going to be what i call a health marketplace. in other words, right now, if you have health insurance on the individual market, you are basically -- you basically have very few options. what we would be doing is setting up a place where individuals would be able to go to the federal government and those who -- those insurers who want to would be able to participate in a plan that they provide a decent health insurance package at a reasonable cost, and they would be approved by the federal

government. individuals would be able to choose from a number of private plans. plus, there would be one public plan similar to medicare that would compete with the private plans and what we call a health marketplace. because a lot of people would get insurance through this health marketplace, the cost of insurance would inherently go down. it would be as if there was one large group plan 40 million, 50 million, 60 million americans. new jersey might beat paying for a family of four, $12,000 a year, -- new jersey might be paying for a family of four, $2,000 a year, and i think that cost would come down. the federal government would provide a subsidy on a sliding scale, depending on your income, that would also help defray the cost of the $7,000 or $8,000 a year. if you were making $25,000 a year, you might get 80% of that premium paid for by the federal government. on a sliding scale, it might go

up to 10% subsidy if you are making, say, $60,000 or $70,000. after that you would be paying the full credit. host: do you think these proposals would impact the of thavailability of private health care? senator mitch mcconnell said it would be the end of private health care as we know it. guest: i do not think so. in the marketplace people will find ways of providing good insurance at a low cost, but there is a competitive aspect to it with the public health plan that would drive health care costs down in general. in other words, there would be competition, a public auction, if you will, that might be similar to medicare. people would be able to choose that vs a private option, depending on the benefits that

they think they can do. i think that kind of competition is healthy. there are probably large areas of the country, particularly rural areas, where the private insurers would not offer coverage. because, remember, they do not have to offer coverage if they do not want to. in those places, the public plan would be sort of a back up to make sure that people do have at least one option. host: the president talked yesterday about making payments, making sure that doctors are paid for the service given rather than tests that are administered. guest: there are various ways of doing that. you can basically set up some kind of a standard that says, look, you know, you should have an mri, you should have a cat scan in certain circumstances, and if there is over

utilization, you could reduce the amount of reimbursement that the doctor sees, for example, under medicare or medicaid. there are also a lot of models that we're going to try. most of these are going to be on a demonstration basis. one is for example a medical home model that basically says one person may be our primary caregiver that coordinate's care, so that primary care giver, for example, is watching to see what kind of care or tests, specialists, hospitals are giving to you. he or she has that responsibility, and maybe their reimbursement is linked to that to make sure that the care is coordinated and there is not over utilization of certain tests and procedures. we are going to try a lot of new things because the emphasis is going to be on prevention. the idea is that we want people to see a doctor on a regular

basis, which, of course, if you have no insurance, you do not do that. there is an emphasis on eating well and preventative measures rather than just -- i mean, right now, essentially, all providers get paid based on how many procedures they do. that encourages them to do more procedures rather than look at you as a whole from a well this point of view. host: representative, we are joined by carrie budoff brown of "the politico." guest: hi, representative pallone. on the senate side, they are taking a strong look at a proposal from senator kent conrad on a cooperative, a nonprofit cooperative, as an alternative to the public plan.

you said you are considering a public plan based on medicare. it is kent conrad's model something that your colleagues are taking a look at, that even has any chance of passing the house? if not, i guess given that the senate is not looking at a medicare model for the public plan, how do the two changers' bridge -- how do the two chambers bridge your differences on that point? guest: i use medicare as an example because people familiar with it. i think the people that fear a public plan are afraid that it is going to be all paid for by the federal government, it is not going to make a profit, and the federal government is going to favor it in many ways as possible so that there is not a level playing field. what we have said and what i have said is that you have to create a level playing field.

for example, the public plan has to rely on premiums of the people that are purchasing it, just like a private plan. it cannot be subsidized by the federal government. you know, basically you say that whether it is advertising, whether it is subsidization, whether it is -- whether certain doctors participate, all these things are made the same between the public and private plans so the competition, if you will, becomes who is charging more, who is providing better services, and then it becomes a competition that is real because there is no favorability for you because one is getting a subsidy and one is not. that is the concept of a level playing field. that is being passed around the senate, and hopefully we can come to an agreement on what is a level playing field, and then a big -- and then it does not

become this opposition to the public plan. i'm hoping people are not just saying i do not like it because it is public, that somehow the government is there. if you take that position that anything public is bad, then i am not going to convince you. most of the senators and house members i'm talking about say i do not have a problem with it because there is a level playing field. host: thank you for your time, sir. guest: i appreciate it. thank you. host: carrie budoff brown, anything you want to shed light on before we go back to calls? guest: i think it is interesting what he says about the public plan. the senators, the lead senators on the finance committee have gravitated away from a pure public plan option. that idea put to a lot more credibility on the house, and it

is a huge sticking point. the conference committee, if it does get that far, will be a knock down/drag out fight, i think. host: next call, silver spring, maryland, a physician. richard, on our republican like. caller: thank you for taking my call. i would just like to takmake a point. i did hear president obama's speech to the ama, and the past president of the ama at the news conference. there are a couple of things i would like to point out. as physicians, we often are faced with -- somebody made a point earlier -- undocumented workers are the most demanding. in other words, even patients who have no insurance, when they walk into the emergency room, they are the most demanding patients because, why? they know there are people

sitting there waiting to help the mall. it so happens that these patients come waiting to help them all. if they do not -- waiting to help them out. they say my attorney told me that i should get these tests done. so, constantly, there are these advertisements going on over and over again telling these people that if you are heard on the job, if something happens, call us and a lot of money is owed to you. this is where the difference of medicine expenses go up. this is why they have to cover all the bases. what my suggestion is, just like the way physicians, just like

the way president obama could not commit to capping awards -- there has to be a way of letting people know that they are coming for treatment, and the doctor to the best of his knowledge and ability will treat him. this is why my other suggestion is that if the government can take a proactive approach to more public clinics run by local counties, and documented people should be able to go there and be treated under the government house supervision, then, you know, lawyers should not have free-wheeling practice, as you

work. host: we have to leave it there. we appreciate the input. time for us to look at another level -- another legislative aspect. representative wally herger of california. representative, tell us about your role in shaping this debate. guest: i serve on the ways and means committee, which has joint responsibility with health care, and this is certainly one of the biggest issues before our committee. i might mention also in front of the congress this year. host: tell us about the republicans on this debate. what role are you going to play in the next few weeks? guest: i think it is important that we get all the facts out, that this is too important an

issue, the issue of health care, which affects 1/6 of our entire economy, and in which virtually everyone unanimously is aware that it is broken. that we get all the facts out. we are having a markup in mid july. we're having a hearing this coming week on the health care legislation. there are some very concerning aspects that are out there that i believe need to be gone over. host: what are chief among them? guest: welcome the idea that somehow the government can come in with a plan that is going to compete with the private sector, a government and can come in and subsidize -- a government that can come in and subsidize and

change the whole system i think is very concerning. we have an independent study, that came out indicated that if we did have these so-called public option or government plan, that 120 million americans would be forced into the government health care. who can compete with subsidized plan? that is a major concern of many of us, and i think of most americans. host: you serve on ways and means. is your aspect how to pay with -- how to pay for these things? guest: well, it is. anything where revenues are raised, as a medicare, that is our responsibility. that gets into the next big concern, how do we pay for it? a study just on what we see come out, the prospective kennedy plan in the senate, they are

talking about $1 trillion in spending. again, how do we come up with that money, particularly at a time when our economy is hurting, as it is? host: "the new york times" reports this morning on democrats saying they were trying to decide whether to finance coverage of the uninsured with one broad based tax or a combination of smaller taxes." what do you think about that? guest: that is a tax that is a hidden tax, a tax added virtually at every level of production, which means you could have what would appear to be 10 small taxes all added together they can raise huge amounts of revenue. therefore, taxing the american public by a huge amount, which is basically hidden.

i am a very strong opponent of a value-added tax. i think it is a bad idea, and thaparticularly during a recess. it would hurt everyone, including small businesses that we need to be creating jobs. host: what about amendments? well amendments be offered by republicans on the committee, and what is their likelihood of being put into a final package? guest: well, we will be having amendments. we have alternative plans for health care. health care is something that we all admit, that we're all very cognizant of it needing to be revised. but we need to do it in the proper way. my concern is in the areas that you will be seeing amendments, tax reform, we need a level playing field. if you are a small businessman, you cannot deduct your taxes,

your health care taxes, as a big business can. we need liability reform that we will be seeing amendments on. that would allow our doctors not to be forced to prescribe every test just to protect themselves from liability. there is a number of areas that you will be seeing constructive republican amendments that will be in line with what our health care plan is. host: representative, we are joined by carrie budoff brown of "v politico." guest: i want to follow up on a question i asked representative pallone, about kent conrad's

nonprofit plan for insurers. is that something that you and your republican colleagues could support? guest: i think that is potentially promising. it is something that is not a government plan. our concern is that no one can compete with the federal government, who can subsidize without -- with borrowed money that will be paid for by our grandchildren. i think anything that brings competition is potentially good, an idea of having some type of private cooperative is certainly something that sounds very positive. of course, it depends on what the details are, but we are certainly open to ideas. but not if it looks like a government plan. host: representative waleed herkyly herger, thank you for a

time. ms. brown, any fallout from that discussion? guest: is an interesting discussion. he said they will see amendments on medical liability reform and other concepts that the democrats just have not really put an emphasis on and i think you'll see a really big clash in the next six weeks, how the two different parties few solving this problem. coming to an agreement is the challenge that they have, and i think that is why viewers and others are skeptical that will solve and work out. host: the question, will employers be put on this plan,

and will that be an option? guest: employers could pay into a system coming into an exchange where if they do not offer insurance themselves, they can pay into exchange that employees can then perches on their own, and the democratic proposal, they can purchase on their own, and the democrat -- it is possible. host: this e-mail from maryland. what better incentive to keep fit than having to pay for health care? this gives us the choice. having the government pay for it means not having any control over another tax increase. i was born and raised in england. no american would be satisfied with the level of care there compared to hear. kingston, new hampshire. thank you for waiting. caller: rouwe received a

questionnaire during the election. one of the questions had to do with aids in africa, and all the candidates responded to the question of aids. but obama was the only one who wants to increase what we were spending out of africa. then on the remaining six questions, he continuously, even if it was education, it did not matter what the question was, -- he continuously spoke about aids in africa. to qualify for medicaid, you have to be very low income. i do not know how he expects people to pay 15%. i'm wondering if that 15% charged to us living on the states will fund his need to help africa. host: pocono beach, florida, on our independent line. pompano beach, florida, on our

independent life. caller: it is an american. they have been turning people down for years. everybody has preconditions. i met a woman who broke her ankle. they said that was a precondition for her health care company. the republicans and democrats, everybody running around calling themselves a democrat. they have to divide and conquer. they have more lobbyists. i work at two jobs for many years, ok? i am a v.a. i went two years with my right hand being injured.

all i got was this and that. that had to remove all my bones in my wrist. two years. i have a woman in my office, a young girl, 22 years old. she is going through some kind of problem that women goes through. she is not going to get any health care. everybody is talking about the government paying for it, it will become worse. have you all woken up yet? host: we hear from the present one more time, talking about change of his proposals pass. >> if you like your health care system and your doctor, the only thing reform will mean to you is your health care will cost less. if anyone says otherwise, they are either trying to mislead you or do not have their facts straight. now, if you do not like your health care coverage, or you do not have any insurance at all, you will have a chance, under

what we have proposed, to take part in what we are calling a health insurance exchange. this exchange will allow you to one-stop shop for a healthcare plan, compared benefits and prices, and choose a plan that is best for you and your family. the same way, by the way, that federal employees can do -- from a postal worker to a member of congress. host: next call, berwyn, pennsylvania, republican line. john. caller: yes, i voted for president obama and i agree that we need changes in our health- care system. i can even agree that we need to limit the amount of tests being done here. but the plan that he talked about yesterday where my getting a test is directly linked to a

dr.'s bonus is going to be a big mistake. we have all seen what happened in the financial markets with the bonuses, and doctors are no different than the bankers. we do not need to tie tests to the doctors getting illnesses. host: when netiquette -- wingate, north carolina. caller: i did not know where they are getting information from, but i have been on medicare and i only pay less than $100 a month. my wife had -- they were charging her almost $500 a month just for me. who would not rather pay less than $100 and pay $300 or $400 a month. host: for the $100 a month that you pay, give us the scope of your health care. what do you get for that?

caller: hospital, doctors, prescription drug plan. host: how often do you take advantage of it? caller: once a month. host: what is that once a month, a doctor's visit? caller: doctors i go about every two or three months. host: thank you. compared to $500 a month for a private plan, he gets to pay $100 a month. guest: that is the argument, that a public plan will save people money. right there is a i think the exhibit for that argument. at the same time, you know, that brings us to a philosophical argument of what role government should be playing. you are seeing obama talk about what he talked about yesterday, that when you have that competitor, the government, it

will keep insurance companies honest and it will foster competition enforce the insurance companies to lower their prices. of course, the argument of the insurance company is that that is not necessarily a good thing. medicare has not worked well for the system, and it is just something they cannot support. host: "the washington times" reports that senate minority leader mitch mcconnell and minority whip john kyl have a different -- guest: evidence will be put out there to help doctors guide their decisions. the two senators have said they do not want the government to determine what doctors will do for their patients, and so they are trying to codify that language.

yet the president yesterday did say something similar, and jon kyl and mitch mcconnell did say that obama endorsed their approach. host: pennsylvania, martin, on our independent line. caller: what the president is trying to do with his health care plan, that is not the problem. the problem with the people in washington, d.c., is that they are bought and paid for by the medical companies just like the oil companies. with the medical companies, there was a man on your show the other day that he did right on the head -- we should be suing the people letting these medical companies get away with reaping the public for what they charge and what they charge us for because their prices are way high and this country. the same medications in canada from the same company are cheap. this is what i am saying. until we stop these lobbyists, the special interest