been denied coverage because of pre-existing conditions or somebody who finds out that what they thought was going to be a $500 bill and of being a $25,000 bill. i was at a town hall meeting in green bay wisconsin and met a young woman 36 years old with breast cancer that metastasize. two small children. she and her husband both deployed with health-insurance and she still has $50,000 worth of debt. all she is thinking about right now, instead of thinking about how to get well, she's thinking if i don't survive this, my legacy to my children might be another $60,000 worth of debt. everybody here knows stories like that. so this is a problem that we can't wait to fix. it is not something that we are going to keep on putting off indefinitely. this is about who we are as a country, and that's why we are

going to pass health care reform, not 10 years from now, not five years from now, we are going to pass it this year. that is my commitment. we are going to get it done. [applause] >> we've already started to see some progress in washington. those who said we couldn't do it, they are already being surprised, because as a consequence of us pushing, suddenly the drug companies, the insurance companies and the hospitals, all of them are starting to realize this train's leaving the station, and we had better get on board. just a few weeks ago the pharmacuticals industry agreed to $80 billion in spending reduction that is we can use to close the so-called dougnut hole. some of you know a what that is, where senior citizens who were on the prescription drug plan under medicare, they get their drugs reimbursed up to a

certain moment, and then suddenly there is a gap until it reaches thousands of dollars in out-of-pocket costs. so-and-so we've -- so we've struck a deal with drug companies to cut those costs in half. we have seen when we put pressure to reform the system, then these industries are going to have to respond. lant most, doctors and hospitals, labor and business, all came to go and agreed to decrease the annual rate of health care growth to 1.5%. that would translate into $2 trillion or more of savings over the next decade. that would mean lower costs for everybody, for ordinary families. in the past two weeks, they have made tremendous progress on a plan to hold down costs, improve patient care and insure

that you won't lose your coverage even if you lose your job, change your job, or if you have got a preexisting medical condition. now we have to finish the job. there's no doubt we have to preserve what is best in the health care system, and that means allowing americans who like their doctor and health care plan to keep their plan. that is going to be a priority for us. [applause] but we also have to fix what is broken about the system, and that means permanently bringing down costs and giving more choice for everyone. and to do this, we've got to do a couple of things. we have to build on the investments that we have made in electronic medical records. we already made those investments in the recovery act . because when everybody is digitalized, all your records, your privacy is protected, but all your records in a digital form, that reduces medical errors. it means nurses don't have to read the scrawl of doctors when they are trying to figure out what treatments to apply.

that saves lives, saves money, and it will still insure privacy. we need to invest in prevention and wellness that help americans live longer, helter liblings. we know this saves money. if we can help somebody control obesity, they are less likely to get diabetes, and if they are less likely to get diabetes, that means we are going to be saving a whole lot of money in hospital costs. the biggest thing we can do to hold down costs is to change the incentives of the health care system that automatically equate expensive care with good care. this is an important concept, and so i want everybody to focus on this. we have been under the illusion that the more health care we get, the healthier we become. and it turns out that every study shows that the question is are you getting the right care? are you getting the high quality care, rather than are you having a whole bunch of

tests ordered that are unnecessary, getting treatments that are unnecessary, staying in hospitals which may be unnecessary, all of which drifles up your costs but doesn't make you better. we have to ask ourselves why there are places like the health care centers in pennsylvania or salt lake city, that offer high quality health care that is 30% lower than other communities. if they can do it, there is no reason the rest of america can't do it. we have to identify the best practices across the country and then we have to replicate those successes elsewhere. and we should change the procedures that reward doctors and hospitaling for the tests and procedures they prescribe even if they don't make people

better. doctors across this country did not get into this profession just to be bean counters or paper pushers, but more and more time that doctors should be spending with patients is spent on administration and dealing with how they are reimbursed. they have to create a simplified system where they are reimbursed for quality caras opposed to having to distort their practices in ways that don't actually make their patients better. it is also time to provide americans with no health care insurance with more affordable options. i believe it is a moral and economic imperative. [applause] >> it is a moral imperative because in a country as wealt as ours, people are working and holding up their responsibilities, they shouldn't be bankrupted just because they get sick. on the other hand, it is an

economic imperative because every single one of us who do have health insurance, our families on average are paying an extra $1,000 in premiums for uncompensated tears. hospitals and doctors are adding those costs to your premiums. insurance companies are adding those costs to your premiums even if you don't know it. and if we can get a system in which people are getting regular check ups, mammograms, all the things that we know prevent disease from occurring over the long term, or at least allows us to catch them early, that is going to allows us to drive down costs for everybody. so, what we have been working on is the creation of something called the health insurance exchange, and this is going to be a marketplace which would allow you to one-stop shop for health care plans and compare benefits and prices in simple,

easy-to-understand language, and then choose the boast plan for you. none of these plans would be able to deny coverage on the basis of a preexisting condition. all of them would include an affordable basic benefit pang. if you couldn't afford these plans, then we could provide you a little bit of help so that you can afford these plans. i also strongly believe that one of the options in the exchange should be a public option. in order for us to create some competition for the private sure remembers to keep them honest. if they are in fact giving good service and providing high quality coverage, then that is where people will want to go. but there should be a benchmark there of a public plan, a not-for-profit plan that keeps administrative costs low and focused on providing good service. that way, you can make the decision which deal is going to be better for you and your family. now, i know one of the biggest questions on everybody's mind is how do we pay for all this?

how do we finance reform? and i have made a commitment. because our deficit is a genuine problem, that whatever we do, we have to pay for it. this can't add to our deficits. it has got to be deficit-neutral over the next 10 years. here's the good news. about 2/3 of the cost of the reforms that we are proposing will come from reallocating money that is already being spent in the health care system, but isn't being spent wisely. so it doesn't involve more spending. it just involves smarter spending. a lots of the money being spent in the health care system right now adds nothing to the quality of patient care. i will give you one example. we spend right now -- over the next 10 years, we will spend $177 billion, $177 billion over the next decade in unwarranted subsidies to insurance

companies under something called medicaid advantage. this does not make seniors helter. people who are signed for this private insurance subblings diesed program don't get any better care than those who aren't. the subsidies don't go to the patients. they go to the insurance companies. think if we took that $177 billion and helped families so that they could have insurance and that we could have preventive care? so about 2/3 of the cost of the reform we are proposing is reallocating money already in the system, you the taxpayers are already paying for it. now, one third of it we are going to have to pay for by increased revenues. and what i've promised is that if we capped the itemized deductions that very well thy people do, the top 2% use on their income tax, so that they are getting the same tax breaks as everybody else as opposed to

getting higher tax breaks because they have a bigger house, then we can pay for the rest of reform. we have already identified $950 billion over 10 years, a little less than $100 billion a year in order to pay for the reform. 2/3 of it reallocating money, one third of it with increased revenues. that's a sensible investment for us to make in solving an interactible problem that has been dragging down family finances, businesses and it is federal government for far too long. now, keep in mind by the way, what we have identified as paying for the system, that doesn't include the savings we are going to get from prevention or the savings we are going to get from health i.t., because in using congressional jargon, which i am never supposed to do because nobody understands it, it is not scoreable. that means the budget office can't identify exactly how much you would save even though everybody believes that it will end up saving a lot of money.

we can't put a hard number on it. so we will get additional savings that will drive down costs. in the meantime, the costs of reform will be paid for with hard dollars that we've identified. here is the bottom line. i am almost done here. this is a big complicated topic, so i hope you forgive me. we are starting to make progress on capitol hill. we are identifying ways not only to reform the system to make it smarter, more efficient, no user friendly, better for american families, but also ways to pay for it in a way that doesn't bloat our deficit. but the hardest part is yet to come. because everybody here knows that the easiest thing to do when you're looking at big policy questions like health care is can't be done. the naysayers are starting to line up and finding every

excuse and scare tactic in the book for why reform is not going to happen. this is going on as we speak. what i say to these critics is well, what is your alternative? is your alternative just to stand pat and keep on watching more and more families lose their health care, more and more families with higher out of pocket costs for lest insurance, businesses who are not able to compete internationally, a medicare and a medicaid system that has run amok? is that your alternative? what do you say to all those families who can't pay their medicaid businesses? what do we say to the businesses that have to choose between close are doors or eliminating benefits. what do we say to taxpayers whose dollars are propping up a system that doesn't work and is driving us into debt. this isn't just about those americans without health care. it is about every american, because if we do not act to bring down costs, everybody's

health care will be in jeopardy. if you lose your job or have a preexisting condition, you don't know that your family is going to be secure. all of us are in this together. when it comes to energy, when it comes to improving our schools, and when it comes to health care, i don't accept the status quo, and you shouldn't either. i don't think that the american people want to just stand pat. they know the change isn't easy. they know there are going to be set-backs and false starts, but they also know this, that we are in one of those rare moments where everybody is ready to move into the future. we just can't be scared. we've got to stop clinging to a broken system that doesn't work, and we've got to have the courage to reach out for a future that is going to be better for our children and our grandchildren. i believe we can accomplish it this year. but in order to make it happen, i'm going to need ordinary

americans to stand up and say, now's the time. you are what is going to drive this process forward. because if congress thinks that the american people don't want to see change, frankly, the lobbyists and the special interests will end up winning td2h@ @ @ @ @ @ h@ @ @ @ @ @ @ will end up winning the day. but when the american people decide that something needs to happen, nothing can stop us. so i hope you'll join in. thank you very much, everybody. [applause] all right. if i'm not mistaken, valerie, you are going to be in charge of directing -- you're traffic cop. >> in charge. thank you very much, mr. president. so in my opening remarks, mr. president, i mentioned that when you released your youtube video over the weekend, we received literally hundreds of video

questions from all across country. your staff looked through all of those question and selected a cross section that represents a broad cross section about the kinds of question that came up. i want to emphasize that the president has not seen the questions ahead of time. absolutely not. so we're going to begin with the video question, mr. president. look at the screen. >> all right. >> hi. my name is steve white. my question is, why are we considering a health care plan which maintains the private insurance companies instead of a single payer plan which would eliminate the high overhead cost saving the american taxpayers hundreds of billions of dollars while covering everyone in our country? thank you. question. i'm not sure if everybody could hear it, but the gist of the question is why have we not been looking at a single payer plan as the way to go? as many of you know, in many

countries, most industrialized advanced countries, they have some version of what is called a single payer plan. what that means is essentially that the government is the sure remember. -- insurer. the government may not necessarily hire the doctors or hospitals, a lot of those may still be privately operated, but the government is the insurer for everybody. and medicare is actually a single payer plan that we have in place, but we only have it in place for our older americans. in a lot of those countries, a single payer plan works pretty well, and you eliminate, as scott i think it was said -- you eliminate private insurers, you don't have the administrative costs, the

bureaucracy and so forth. here is the problem. the way our health care system evolved in the united states, it evolved based on employers providing health insurance to their employees through private insurers. that is still the way the vast majority of you get your insurance. and for us to transition completely from an employer-based system of private insurance to a single payer system could be hugely disruptive. and my attitude has been that we should be able to find a way to create a uniquely american solution to this problem that controls costs but preserves the innovation that is introduced in part with a free market system. i think that we can regulate the insurance companies effectively, make sure that they are not playing games with people because of preexisting

conditions, that they are not charging wildly different rates to people based on where they live or what their age is, that they are not dropping people for coverage unnecessarily, that we have a public option that is available to provide competition and choice to the american people, and to keep the insurers honest, and that we can provide a system in which we are, over the long term, driving down administrative costs and making sure the people are getting the best possible caras a lower price. i recognize there are a lot of people who are passionate. they look at france or some of these other systems, and they say well, why can't we just do that? well, the answer is that this is one-sixth of our economy, and we are not going to suddenly upend the system. we are going to fix what is broke about the system. that is what congress is committed to doing, and i am

committed to working with them to make it happen. >> now how about a question from the audience? a show of hands? >> what i always do here is i go girl-boy-girl-boy so i don't get into trouble. this young lady here. somebody was pointing at you. do we have a microphone for folks in the audience so that everybody can hear the question? i think there is somebody coming from this direction. you can just hand her the mike. >> good afternoon, mr. president. i will try not to cry. [laughter] >> i am trying to figure out what i can do currently. my situation is i had renal cell carcinoma in 198. my dad was dying at the time. i could not be tied up having my kidney removed. they did procedures to kill the

tumor then. i had insurance and everything was paid for. but basically because of the damage the radiation did, i am no longer able to work respect, and i have no health insurance. now i have a new tumor, and i have no way to pay for it. the doctors will not see you without paying $100 or $150 to come into their office. i can get checked into a hospital under the indigent program and run tests, and then they release me. but that costs. social security will not give me disability because renal failure is no longer qualifying under social security. i cannot get medicare through the state of virginia because you have to be considered disabled through social security to qualify for medicaid in virginia. i get food stamps, but that's it. i'm just trying to figure out how i am going to make it nine years until i am qualified for

social security, now that i have a new tumor and no way to treat it. >> come on over here. first of all, we are going to find out -- we will get your information, and we will see what we can do to help you. i don't want you to feel like you are alone out there. [applause] without knowing all the tails, i am not going to give you an answer right now about exactly how we can help. we are going to find out what we can do within existing law. what was your name again? >> my name is debbie. >> debbie is a perfect example of somebody who, in a country this wealthy, be able to provide coverage for her health care problems. what we don't want is a situation where debbie gets worse and worse because she is

not getting treatment and then ends up having to go to the emergency room. as i said before, all of you will pay for it anyway. it is just that you will pay for it in terms of a hidden subsidy, and she is not getting the best care, and we are actually paying more than we would have if debbie right now was getting treated on a regular basis by a physician who knew her history. debbie, you are example a, and we appreciate you sharing your story. we are going to try to find ways to help you immediately. but the long term problem here is going to be how do we create a system in which debbie is getting the preventive care that she needs and is able to get regular check ups, is able to get treatment in a way that is much more cost efficient than the one we've got right now, and i'm going to make a commitment that we are going to get that done this year.

all right? [applause] >> anybody who needs medical treatment can get free treatment for the 24th, 25th and 26th of july. >> we will help advertise that. >> if you would like to showcase why there is a need. i think it is 7,000 people get treatment there every day of those days that it is free. >> which is a wonderful program. but i think as senator warner and governor kaine would agree, we can't have a system that is relying on three days of free care and 362 days in which people don't have health care. that doesn't make any sense. debbie, thank you for sharing

your story. we appreciate you. thank you. [applause] >> thank you, debbie. so many of the questions that are put to you on the video, mr. president, are also very personal. now we are going to take another from the video. >> my mommy and daddy have small businesses, and we need health care. >> i actually have to work for a company so that we can get coverage because my daughter is an automatic i decline, and we are too small of a business to be able to absorb the cost. how can health care reform help us? [laughter] >> as somebody with two daughters, i am a sucker for anybody who uses their daughter in a video. my staff probably knew that. they figured well, he is going to be a soft touch after that one. small business owners are those who are being in some cases

hardest hit by the rising cost of health care. and in some cases, they just can't afford to prifed health insurance to their employees, and that is frustrating, but they are operating too small a margin, or they don't have enough employees, and so they don't have enough leverage to negotiate with insurance companies. so the offers companies give them for the cost of coverage per person end up being way higher than they would be for big companies that have more consumer power. in some cases, small businesses can't even afford to provide health insurance for them, small business owners. a huge percentage of small businesses are sole proprietaryships, maybe they have one or two people working for them. so they are like consultants or self-employed individuals. they just can't get a good deal. this is an example of where

this health care exchange could be so helpful. part of what we want to do is to allow small businesses as well as people who are self employed, individuals whose companies don't provide coverage, to come to this exchange, take a look at a menu of plans that are available, join one of those plans. you may qualify for a subsidy from the federal government, and you then become part of a big pool that gives you some leverage over the drug companies and the insurance companies to drive down costs. and that's part of the way that health care reform can provide direct savings to american families right now, by giving them more leverage. i am very pleased that the drug companies decided to cough up $80 billion to help close this dougnut hole. i have to be honest with you though. were it not for the prospect of serious health care reform, i

don't think they would have given up that money. that is just my guess. [applause] and so these same principles play when it comes to setting up this health care exchange. if we do it effectsively, then not only will families be able to make some very clear choices, and small business owners make some clear choices about here's the best plan available for us that fits our particular needs, but they are also going to be part of a broader group that can apply some leverage in the system. that is essentially what federal health care employees do. mark warner has a plan that all members of congress and federal employees have, and it is not cadillac care, but it is good, solid, decent care with a range of options. part of the reason that it is a good program is because there

are so many federal employees. well, we should provide that same kind of leverage for the small business owner who right now is too small on their own to be able to get the best possible deal on the insurance market, and that's what we want to provide in this health care reform package. good. >> i think we are ready to go back to the audience. >> it's the guys' turn now. ladies, keep your hands down. this young man right here. if we can get a mike. >> i have been hearing a lot did not -- >> what is your name? >> jason. >> what do do you? >> i work for a group called health care for america now. >> i think he knows something about health care. >> obviously i read the news a lot, and i have been hearing a lot about the price tag of health reform and how people are very concerned that it is going to cost $1 trillion. i am most concernedbo