jobs, and then cobra ran out, where colbern was not subset get -- or cobra was not subsidized, and you had someone at home who was sick or a child that got sick, you would suddenly say, now i see the need. part of what we have to do is always say to ourselves there, but for the grace of god go i.. that is point number two. point number two -- 3, the way that insurance companies have been a target -- arguing -- operating, even if you have insurance, you did not know what you have. if you are not lucky enough to work for a big company that is a big pool, essentially it is almost self-insured, which is happening is you are going out on the marketplace. you may be my -- you may be buying insurance. you think you're covered.

when you get sick, they decide to drop the insurance, right when you need it, or they try to find what they consider to be a pre-existing condition that would justify them cancelling your policy, or there is some fine print in there where you have a lifetime limit and it turns out you thought you had coverage, but it only goes up to a certain point, and then afterwards you have to pay out of pocket. even after paying all those premiums, you are now in the whole and you're going -- you are now in the hole, and you are going bankrupt.

the final point, set aside anything we did in the reform, if we allowed the contradictory to go on, it is out of control -- the cost of health care. i've not talked to bob about what his costs look like for celgard employees, but i can tell you that health-care costs have gone up. the price of health care has gone up three times faster. -- three times faster than wages. either the company is going to have to swallow those costs, which means it is less money they will use to hire new workers, where they will pass along those costs to their employees in the form of higher premiums or higher deductibles. what is happening federally, because the costs are so lot of control, all the programs that we already have like medicare, medicaid, the children's health insurance program, all of those things are completely out of control. if you're concerned about a deficit, what you are really

concerned about is the cost of medicare, medicaid and all the other programs that are already in place. here is what we did. what we said is, number one, we will have the basic principle that everybody gets coverage. the way we appointed to that -- the way we are going to do that is to say that most people individually, they should not buy health insurance on their own because they have no leverage. . .

three, four, 5, 6 -- because of these changes that we have actually saved money from this, even though more people are covered. you will hear the critics and republicans say that defies common sense. if you add millions more people, it has to cost more money. you cannot pretend that will help us on the deficit. let me give you an example. if you have a house and a big

hole in your roof, and it is raining and snowing through the roof, and there are some people whoe are -- who are nice and warm, but family members who are shivering and cold -- if you repair the roof, it costs money. the water damage in the heat -- you count all of the savings over time, and it may turn out that you are saving money and all of those been in -- all of those family members are now war, too. that is what we are trying to set up. -- all of those family members

are now warm, too. the savings we anticipate -- we do not count these when we are making sure it reduces the deficit. here is how we make sure we pay for it. number one, we are eliminating a bunch of waste, fraud, and insurance subsidies that were being paid out under medicare that are not making our seniors any healthier. it is a pretty sweet deal for insurance companies right now in a program called medicare advantage were they get $18 billion a year -- where they get $18 billion a year paid to them to amend it -- manage a medicare program that about 8% of seniors are getting -- $18 billion a year pay to them to manage a medicare program that about 8% of seniors are getting

benefits from. that is one way we pay for half of this thing. the other half -- it is true that we have identified some additional taxes that we think are unfair. let me describe them to give you -- that we think our -- that we think are fair. let me describe them to you can give you some examples. if you are on salary with any of the companies around here, you are paying your medicare tax on that, right? n/,pñ+3soçw7h[kómrd you get most of your money fromd dividends and capital gains, you do not pay medicare taxes on that. your help -- you are eligible for it. you look at the same benefits as anybody else. but because your source of

income is unearned income, capital gains and dividends, you do not have to pay this. how is it that the guy who is cleaning up the office is paying the medicare tax and the guy who is making capital gains is not? what we said was, if you made more than $200,000 or to wonder $50,000 a year, that money you make -- or to -- or $250,000 a year, that money you make from capital gains -- you have to pitch in for it just like everybody else. it is a concept of fairness. [applause] what the congressional budget office is saying -- i am sorry we question -- these answers are long sometimes, but i want to make sure that i am really answering your question. i really want to respect the importance of your questions.

what the congressional budget office has said is that, as a consequence of the savings from the waste and fraud, combined with the new revenue source that i just mentioned, this thing is going to actually reduce our deficit by over $1 trillion. we're actually saving money. we have closed the roof, and the house is now insulated and warm. we now have people who were left out in the cold being taken care of. that is the concept. i know that, for a lot of people, they have a legitimate concern about -- it seems like government spending is out of control. i understand that. i feel that way. but understand what happened. when i walked in, we already

had a $1.30 trillion deficit -- the annual deficit of $1.30 trillion, before i did anything. we had $8 trillion in accumulated debt from the war in iraq, not paid for, the prescription drug plan, m edicare part d, not paid for, the bush tax cuts, not paid for. we already have all of this debt that had just been piled up, but nobody had noticed because things were going kind of good. just like a lot of folks did not notice their credit cards were going up or their home-equity loans were going up. when things are going good, you tend not to notice. all of that debt had already accumulated. we then had to spend $787

billion on the recovery act to do all of the things -- unemployment insurance, cobra, a program to help states keep their budgets of " so that they did not have to lay off teachers and -- of low -- to keep their budgets afloat so that they did not have to lay off teachers and police officers. we did things to help spur economic growth. we had to spend that, but it is only a fraction of what our debt was. in addition, when the economy goes south, there are fewer tax revenues. you are putting money out to help people with unemployment insurance, but getting less money in because people are out of work in businesses are out of money. we have a significant debt that has to be paid down. i am freezing government

spending. we're reinstituted pay-as-you- go. you cannot start a problem -- program without paying for it. our health care program is paid for. if you are worried about leaving that to the next generation, which i know you are, the most important thing we have to tackle is our health care costs. medicare is, by far, medicare and medicaid are the biggest things that are looming on the horizon, in terms of what our debt is going to be. nothing else comes close. if this health care bill never existed, if i did nothing about it, we would actually be a $1 trillion worse off over the long run. even with the savings we get from health care, we still have to do more. if you do not believe that, go on our website and you can look at how the federal budget works. a lot of people think, if you just eliminated foreign aid, we

could balance the budget. or if you eliminated earmarked, we could balance the budget. in remarks -- pierre marques -- earmarks account for less than 1% of the budget. foreign aid accounts for 1.5% too 2% of the budget. most of the budget is medicare, social security, medicaid, and defense spending. as well as interest on the national debt. that accounts for about 70% of the budget. all of this other stuff that we sometimes argue about is not the big stuff. we have to tackle the big step if we're going to get our budget under control. boy, that was a long answer. i am sorry. [applause] i hope i answered your questions. i have to make this the last question. i am going to ask this young man. >> my name is matt.

i flew down from cleveland, ohio, this morning. we are a slider -- the supplier here. can i get a ride back to the airport? >>, on. let us go. -- c'mon, let's go. >> the limousines that you drive -- will they be electric some time soon? >> i will be on -- i will be honest with you. when i first got secret service protection, i asked, can we make these cars hybrids? i apologize, because the secret service said no. it is not because the secret service are bad guys. it is because the cars that i am in are like tanks, with some

reinforcements on them that caused them to weigh twice or three times what an ordinary car ways. they could not get the performance in terms of ratios, using a hybrid engine. here is the good news. as part of our overall energy strategy, i have ordered us to triple the federal fleet that is hybrid. government -- the government purchases a lot of cars for all kinds of things. i am assuming we are the biggest car purchaser -- maybe hertz is bigger. but we are big and we are using our purchasing power to help encourage the clean car

industry and hopefully to get you more business. thank you very much, everybody. god bless you. thank you. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] ["stars and stripes forever" playing]

>> thank you. >> thank you. ♪

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>> now, a discussion on the health care law, when it will take effect, and what impact it will have on your current coverage. this is about 40 minutes. >> julie appleby. when does the health care bill take effect? guest: that is a very good question. parts of it take effect this year. the majority of it is a little bit further off in 2014. you buy coverage, the exchanges where you will go to buy coverage, the in -- requirement insurers not -- people who have pre consisting conditions. host: pre-existing does not take effect until then? guest: there is one area where it does, that is children under 19 with a pre-existing medical condition. remember, there was a bit of a flap about that last week.

does the law say you can't reject children under 19 or you just can't exclude coverage of their condition? there was some back and forth and the law was not real clear, according to a lot of the policy wonks. but at the end of the day, the health and human services secretary has written to the insurer's and said we want you to coverage kids under -- kids under 19, with pre-existing conditions, you can reject it and said they will follow what the law says. that is one of the changes that take effect this year. host: what else takes effect this year? guest: about a dozen -- maybe more than a dozen. three big ones outside the realm of insurance and the number of changes to insurance. the kids under 19, and also they are doing things for the so- called don't hold for medicare, a little bit of money for that. host: are they close in the hole completely this year? guest: this year if you hit them

donought hole -- you spend a certain amount of money, i think $2,800, and after you hit the $2,800 of total drug caused the beneficiary pays 100% until the region of the number. in that do not poll, if you hit it, you get a $250 rebate -- in that donought hold. then a 50% discount. over time, they will shrink that -- ultimately end up paying 25% of the cost for all drugs and you are in the gap. host: the numbers are on the screen. we are talking about the immediate affects of the health care bill. allow 30 days between your calls. guest: a high risk pools --

folks who are medically uninsured, they will be able to presumably by coverage once they are set up. they are supposed to do that within 90 days. host: uninsured people who have a medical condition that kept them from getting coverage. bonn -- some are closed and have restrictions. only 200,000 people in this country are currently in a high risk pool. this will set aside $5 billion to create these pools everywhere. host: how many people do they think could potentially be in these polls? guest: that is hard to say. i really don't know. it could be several million people. i think a lot of these things happening in the first couple of years of fact -- i don't want to say a narrow swath, but not everybody. certainly the donut hall, 4 million people hit that every year according to statistics. high risk pool, there are

certainly a lot of people were rejected -- that is the second big change. a third change is the tax credits for small businesses that offer coverage. if you have 25 or fewer employees, and they earn an average of $50,000 a year or less, you could qualify -- and you offer insurance now -- you can qualify for up to 35% subsidy to help you buy the coverage for your workers. host: what if you are a small business that does not offer insurance? guest: you don't get the credit. if you start, you could probably get the credit. the president was speaking about this yesterday and he was hitting on this, the small business and go. so -- there are a number of changes to the insurance. they go into effect six months after enactment. after the day your policy renews six month after enactment. for some people in their jobs, it will happen this year -- you know when you sign up for

insurance coverage it is usually january through the end of the year, or for some people, middle of the year, open enrollment. for a lot of people these changes may not happen until january 1, 2011. no more lifetime caps. this is where -- you might have an insurance policy and it says, we will cover up to a million dollars or $2 million, and that's it. those are going to be gone. they are more common, i think, in insurance that people by themselves in individual market rather than what employers often. but some employer plans to have the caps. in fact, i was looking at a survey the other day by the kaiser family foundation, employer survey, and something like 43% of covered workers, those who have insurance, have a cap of $2 million or more. those will be gone. there will be restrictions on its annual dollar limits. some insurance plans -- we will only spend x and not a year on

chemotherapy or this or that. the hhs secretary is going to draw up a list of what are the essential benefits that have to be in a package and then say where those annual limits can be said. so there is a lot of work for the secretary. a lot of these will happen with a lot of these will happen with guest: will determine what is in the essential benefits package and what restrictions can be placed on the annual dollar benefit. host: let's take it from there. we will take some phone calls. gary from democrat, you are on with julie appleby. caller: good morning. c-span, this is a great show today. you need to have more people like this on so we can understand the bill. this is very important. let me ask you a question. i do