in florida we decided we will create our own organization so that whenever we want to talk to marco and our governor, they will hear from all of us as a coalition. it will be a coalition of tea party. we are organizing in a little way, but not top down. we are encouraging people to run for office. we will fight the liberals. we will focus on education. ithese are little things. we will use technology. and we will broaden our base by using other organizations. we use heritage last year. we love heritage. other organizations that helped us, liberty central helped us

understand the issues that were going on. we have a lot of partners out there. and i know i am talking too much. the other thing we want to focus on is the media. they probably will not like me for saying that, but the media really did not tell the truth. not all of the media, but there were a lot of lies out there. the people in the grassroots movement knew it. we want the media to be held accountable as we move through the process. are we going away? no. do we know what we're going to do? no. but we didn't, and we won. [applause] thank you very much. >> fir off, i want to tahnhank

heritage for inviting me share. this has been an amazing couple of years. mostly because it really reinfors the special nature of american politics. it is incredibly dynamics. american politics are incredibly dynamic. sometimes we forget that because we operate with a paradigm of a two-party system. in most cycles this tends to cover most of the basis. wh some people they feel the two-party system is constructed and does not allow for honest grass-roots movements. the last two years proved that. i think the american system is healthy and really worked in the last two years. you had a mass of people who

were very dissatisfied with not just the way washington was working, not just the way the economy was working, but the options that were being offered by both political parties. instead of checking out of the system, instead of staying home and being silent, what you had was a nationwide movement of people. it was really started by -- inspired by a two-minute rant on nbc. it energize people to go out and demonstrate -- it energized people to go out and demonstrate and demand change. i have bn on the side of being part of that, of watching it in writing about it. incredible movement. it i really like iunlike anythig

i have seen since 1978 in california when the tax revolt began. and that was a grass-roots- fueled citizen movement to increase tax rat in california. it was on a specific issue, but it with a grass fire that went across the nation. it said not every solution should involve taking more of our money. in some ways it is very similar to what we've seen but thwiththa party. i think you have to look at the proposition 13 fight in 1978. that is really an analogy. that was not a moveon.org type of organization. there was an organization that

formed in created organization thought got people out in the street. the people went out in the street first and then u.s. leaders that emerged. provincial you have ronald reagan and republicans in the 1980's. -- eventually you had th ronald reagan and republicans in the 1980's. it did peter out when we got othe idea that thae era of big government was over. then people got comfortable. the anti-tax movement, which was an insurgency, became part of the establishment, became part of point in but what we didn't -- became part of what we

didn. this is the same type of dynac. you areeeing people get out in the street and looking for leadership. they are not going out in the street because people told them to go out into the street. they are not going into the street because someone created an organization that had a nice website and was pushing back against an unpopular congress. this was a populist revolt in the cle sense of the word. without organization -- obviously there will be some limitations, i will not even sit limitations. there will be some issues that the movement has to overcome, organization being one of them. it is very easy with a grass- roots movement to simply peter

out. especially after an election. this was an extraordinary set of circumstances. you d an extraordinary economic upheaval. a congress that absolutely refuse to listen to the people that sent them to washington. in ch an arrogant manner that i am not sure that even has a parallel. it was an incredibly arrogant congress. at the same time you had this encroaching regulation that was being part of that arrogance. all of those things tend to motivate peoe into action. now what you have is a repuican congress, at least a republican house, that will be able to address some of the spending issues. hopefully as a consequence we will see economic improvement. hopefully we will see a

reduction in the regulatory environment. the question is, how much success will it take to take the steam out of the tea party movement, if you can? success may be the big issue here. let's say the republicans get into congress and do not do what they promised, do not slowed down the regulatory expansion, spending the -- i do not think eris much of a chance of that with the people we elected. john painteboehner will force ud alona sta-alone issue on what wl be the debt load. it will be very easy for the tea party to maintain momentum, but

also grow momentum. once again you have more arrogance, people who are not willing to listen. the question for the tea party in the next year will be as the tea party succeeds, how you keep the momentum moving and build on success and how you keep people like billie who has sunk an incredible amount of sacrifice and to this movement, how you keep folks in the movements and working and sacrificing like that as we succeed? i think that really is going to be the big question in the next couple of years. [applause] >> i want to thank you, mike, and everyone at hitage for inviting me to speak. i hope i have a little bit to add after that. just before the election i gave

a speech at the federalist society. the deal was for me to talk about some of the candidates i have met during covering the campaign. i talk about what i thought was are really high-quality level of a number of republican candidates. it was a vy good class. these were people who were successful in their private lives. they had never thought about running for office, many of them, until the spring and summer of 2009 when they watched barack obama and the democratic leadership in congress to enact one enormous government initiative after another. they each came around to the idea of running and they aspired to be citizen-legislators. they did not want to be professional politicians. it was a touching story that i told, except thehree guys that i've focused on all lost. -- that i focused on all lost. rob steele who ran a good race

against john dingell in michigan. the last was a man named john dennis who challenged nancy pelosi. after i did thespeech i went back out and did the final trip for the campaign and went to illinois, wisconsin, and ended up in nevada. i think the most impressive person i saw during that trip was a man named ron johnson, the senator elected from wisconsin. very happy in his life as ceo of a plastics manufacturing company. never thought of our running for anything. is appalled by what happens in the first months of 2009 and invited to speak at a tea party rally in oshkosh where he lives. after he speaks people come up to them and ask themhy don't you run?

he began to think about it. after a lot of thought he gets t race and runs on an admirably simple platform. everywhere goes he says i only had two things in my platform, i want to repeal obama care and reduce the size and scope of the federal government. obviously he will have to do other things when he get here, but was an admirably simple platform. he is a very serious guy and is going to do what he said he is going to do. i would expect that he will devote a lot of his energies to repealg obama care. the question would be what would be the tea party's role in policing ron johnson?

the bigger question is a are all of the republican candidates going to be that way? the one thing we heard the most was we have learned our lesson. we really have learned our lesson. we're so sorry we strayed from conservative ways, but if you elect us again, we probably will not do it again. -- we promised we will not do it again. i give them some credit for that. i think some of them have learned their lesson. it seems to me they have gone about their business in a pretty sober way. i think the question for the tea party is the future of the party is in the hands of the congress. what if republicans really have learned their lessons? whatf they've performed admirably over the next -- they

peorm admirably over the next two years? try to bring federal stimulus back to pre-tarp budgets? i think if that happens, a lot of the passion with saul and te saw in the tea party rallies will dissipate. i think their actions will be seriously constrained by an energetic house of representatives, if that is what the republican leadership of the house chooses to do. i suspect that if republicans perform well, we will see a dissipation of the energy that

took place, which will be compounded by the beginnings of a 2012 presidential race. there is no clear, single person that every tea partier would get behind. i think it will disappoindissipe of the energy as well. and there are born to be performance monitors. they will keep their eye on everyone. i suspect that will take place, but i think you may have a situation where the success of the tea party creates a little dissipation and their energy. thanks. [applause] >> now we can go to some questions. i thought i would start off by asking billie, in terms of expectations, how do you think the two-parea party support woud

define congress and the next few years? where would they set the bar? >> we certainly want them to look at the health care bill. we want to see that actuall take place. we want to see limited government. we do not want them intruding into our lives. we want r taxes to be less than what they are and what they're goin to be. we want to see them do the things they said they were going to do. and we want them to fix the mess we're i financially. we are in a pickle. the is an article that i wanted to read. we have passed a milestone that is negative beyond the pale. the u.s. now has exceeded this

level. they have worko do. we are scared out there in america, and we want this congress to fix this mess. we will see if they are successful if they can fix that. >> questio from the audience. yes, sir. everyone identified themselves. >> [inaudible] if you look at the last 100 years of government, it is hard to argue that congress alone can't solve the problem, because we have periods where conservatives may be in charge and where liberals are in charge. where is this tea party movement on the the idea of

constitutional reform? this is a question for anybody. where do think the people are on the idea that we need a constitutional reform if we are going to permit -- permanently limit the idea of fiscal responsibility? >> balance the budget is a big deal in the tea party movement. and we want to go back to our constitutional foundation. the big government is not working for us out there. we want to go back to where we used to be at some point in our history. you know more than we do. we're not exports. but we know it has to go back to wehrwhere it was. >> i do not necessarily think you have of a balanced budget amendment to have a balanced budget.

the problem is congress. congress writes the budget. they are responsible for writing the budget. theyre not going to balance the budget or lower debt just because there is a constitutional amendment to balance it out. it will just keep raising taxes. it is more incumbent on american voters to send people to congress that will spend less. he raised some very good questions, because a lot of the spending right now is automatically triggered. a key part of this will have to be entitlement reform. we wil have to fix or replace social security and medicare. until you do those things, i am not sure a balanced budget amendment is going to address the actual problem. you can balance the budget and still exploit it. >> i think if you did a poll of

suorters, they would favor a balanced budget amendment. i think that they would be happy just to see significant progress in this area, becausif you talk about some hazy, lovely time in the past where things we better 2007 might be a place to start. in 2010 that total federal expenditures are 3.7 trillion dollars. prior to 2007 the glut may be 100 billion per year. -- they go up maybe 100 billion per year. if i could say one thing in semi-defense of republicans, if the economic conditions that pre-date tarp and stimulus of existed, i doubt many of them

would have very passionate about being tea parties. -- tea partiers. the federal deficitis $160 billion. things were not nearly as bad. that is why i think the republicans got all lot of leage by saying if we can just go back to 2008 spending levels. balancing the budget is certainly of gold, but making it better is probably something that would really satisfy most two-parea party activists. to>> you both talk about success dissipating in the movement. i thought opposite. i think that tea party members

usually look -- term. -- usually look long-term. i was wondering if success would help create the long-term of more conservative-leaning of the republican party if they could do some of the stuff you just talked about. >> first of all, there are zillions of ways for republicans to fail, some of which we do not even know about. [laughter] i was actually serious. if they fail to reduce spending, in other words, if they keep to their ways, and like i said, their old ways are not nearly as bad, if they ep to those ways, i think the tea

party -- there is a serious decision to make. there are other issues that the tea party is much less clear about. obviously the president conducts foreign policy, but if there is an enormous foreign policy issue that arises in the next couple of years, what is the tea party's position? wh is the tea party's position on afghanistan right now? they have been extremely focused on budget, and not as much on the entire spectrum of issues that face government leaders. >> i wt to disagree a little bit with that. and people tend to think of the tea party as focus on fiscal issues. that is really what brought people together. but because of my background and

leadership i always founout that there will be one thing -- how many of you are in relationships? right, and when you are ina fight with somebody in a relationship, it always starts with a surface issue. what you have to do is dig deep to find out the real issue, the one we do not want to talk about. that is what happened with the tea party movement. we started with the monetary issue, but the more we work together, the more we found out it was a deeper issue in our country. the deeper issues we have in our country is one word, and it is corruption. that is it. we have been out there working, we have been out there doing our job and sending our money to washington, and the political class corrupted our money. that is the iss that is going on in this country. to>> the issues you're talking

about, dustin, monk-tee long-tem issues. repealing obama care is not something will happen in the next congress because it cannot happen. when she is talking about with corruption can also be talked about in terms of trust. the reason you had depth tea the tea party erupts because of trust. good start counting. i think that is something that we need to make sure we acknowledge. if you have republican congress that starts working on rolling back obama care, serious entitlement reform, serious structural changes to the budget, including the budget

process, i think that is a good start and people will rard them for that. >> our country was founded on a good start. it started with a tax on tea, but the reality was taking our freedom from us. that is e same exact thing that is happening in our country again. >> [unintelligible] my question is it is very easy to win an election -- >> really? [laughter] >> ross perot did this 15 or 20 years ago. newt gingrich did this 12 years ago. the point you are trying to make is many organizations in washington who are fighting for rerm but did not happen. the people that are reflected in congress --[inaudible]

i am from pakistan. we have like 50%. here it is very different. you did not have that type of corruption. my question is, i am republican. one person said we should defeat a congressman because he is muslim. if this is the substance of the pay -- >> it is not t substance of the party. at the start represent the tea party -- it does not represent the tea party movement in america. if somebody said that, shame on them. [applause] >> jeff fox were the, you know

what you are a republican when you threaten the life of jim demint. i wanted to get the panel's call on the conventional wisdom in the establishment circles that the two-parea party cost the republicans the majority in the senate. >> they would of had to completely run the table to win. it was theoretically possibl i do n think it was realistically possible. i think what you had was the tea party. a former senator explained this to me, and i think he is right. you had existing candidates and existing politicians who latched onto the tea party because they thought it could get them support that they cannot have.

christine o'donnell had run to for office before. neitheras a good candidates. ron johnson is a more pure tea party candidates in the fact that he had never thought about running and that is because he saw the energy and concern that he began to think about it. to me, candidates quality mattered more than anything. there were a couple of races that republicans may be could have picked up that they did not, but if you look at nevada, for example, i was out there and i got the sense that angle was going to win by a tiny amount, and that was wrong. if you look at the three finalists, i do not think any of them would have been a great candidate, nor would they have

been carriharry reid. >> the gop never offers poor- quality candidates. and [laughter] got that stuck in my throat. sorry. billie knows that better than anybody. athe whole establishment got behind charlie crist. he was a terrible candidates. there will always be candidates to fall short. who fall short. just to give you a perspective on the actual idea what happened, in 1974 after watergate, when the republican party had to go to a midterm election three months after their president had to resign on national television and then

gerald ford pardoned him after hat, the democrats picked up 49 seats in the house and three seats in the senate. granted they were the majority. this was a fairly-monumental win. you can go to any election and say that there were poor candidates in good candidates and that election cycle, and i think when you take a look at the totality of what happened on tuesday, you cannot walaway saying somehow the tea party costs as something. you can quibble about nevada or delaware, but with although tea out the tea party we would not be having this discussion. >> i would like to save the gop cost us some races. -- i wou like to s the gop

cost the summary says. [laughter] i had to go home and tell my dad that. i thought he would throme out of the house. i supported republicans my entire life, but i am a tea party person now. there were many states where we heard the stories. we talked. it there were some -- there were some goper's that would not get behind the party. you do not want to make hazmat and florida. when mama ain't happy, ain't no bodbdyody happy. they could have taken more seats

had to work with the tea party and the local races. >> i think other countries are looking very rigid were very interested with what will happen in congress. -- i think other countries are very interested with what will happen in congress. you give the long list of guidelines. had there been any discussions on the ground about the issue of dissipation, whether you can keep the momentum going? also, the relationship with the gop going forward. what about 2012, the presidential race -- have there been any discussions on the ground about this? to go where it after the election that everyone might go away. -- >> we were read after the election that everyone might go away. but we all have our individual

sites and we are all reporting people are still joining. we're still steer. -- here. >> your relationship with the gop going forward. >> we love the gop. it will be one of cooperation and working with them we are here. if they do not call us, we will call them. we have people better already starting to get out there in america. we have that all kinds ohad alld teams reaching out to us. we're waiting to seeho the candidates are. we will be part of the 2012 election. >> there has been a lot of

analysis and talk about the ability of the tea party candidates who are now in congress to govern, and a lot of analysts are sayg we're just looking at gridlock. what is your take on this two- ea party block in congress? >> i did many of them would be gridlock as progress. [laughter] a lot of the platform was negative. it was to repeal obama care and stop doing what the administration had been doing. they certainly believe if they can get a handle on spending, make sure tax cuts are extended that they can make a differee and bring around jobs.

we will see what happens othat score. i sthink if they see leadership working hard and passing things in keeping up with issues, if not all of them get through the senate, they will understand that. they understand the way the system works. the question i will house republicans be working hard on their issues? >> if you go to heritage.org you will find a checklist that will hopefully guide the next congress. it involves appealing -- repealing obama care, and reining in government, mostly on the regulatory side. you can go to heritage.org to

see the details. >> all three of you have mentioned that in order to have a niche of reform, we need to cut back on entitlements. if they are the motivation, the courage, and the desire to go into that fight to cut social security, medicare, and all of those programs? >> yes, and we have had discussions about that, because we know it is a problem. again, the american people are smart, and the tea party members are smart. we know we cannot do away with spending without looking at the entitlement programs. the word we do not like is to say that social security is entitlement. people are sick of that, and it want that changed. they paid into a system that was set up by this government, again, sort of like this health care. it was not entitlement. the problem is corruption

happened and it did not do with the money what they were supposed to do with the money. we are willing to work on that issue, but we're n willing to give it all up because they screwed it up. does that make sense? when it comes to entitlements for peoplethat are not willing to work, absolutely we're willing to talk about that as well. there are a lot of good people that can get to work, but they are on the dole of the government, and we cannot have that. we're willing to negotiate. we're going to take care of the people that paid into the system. i have an 85-year-old mother in law that paid into the system and she will get out what she is entitled to. she is willing to the of a little, and not everything for people who are unwilling to work. -- she is willing to give up a little, but not everything for

people who are unwilling to work. >> medicare is an utter saster just waiting to happen. adding obama care to it made it even worse. you cannot get around that. it will be a measure of the seriousness of the people we just sent to washington whether or not they will address that. people like paul ryan who are willing to address it in stark realistic terms. people were willing to talk about what you actually need to do to restructure the system, otherwise it will -- go to heritage.org for the st -- but otherwise it will eat up trillions and trillions of dollars. everyone knows that. that was not sort of wisdom i got offhe internet. every single pern this town

knows that precisely. whether they're willing to do something about it or not will be a function of people holding them accountable. >> there was a debate as they drafted their pledge t americans about what to include about entitlement spending. it did not end up being in. my guess is you will not see any serious action on entitlement reform. >> we have time for one last question, and we will go to the very back. >> a question about 2012, the presidential candidates. will the gop and tea party candidates be behind the same candidates? >> i cannot speak to that. it depends on who the gop gives us.

>> i agree. it depends on the candidates. i think there will be a number of interesting candidates, that we've seen before. i think you will see fresh faces come out. >> [inaudible] [laughter] >> i will ask two questions, who do like in the 2012 field -- who do you like in the 2012 field? . .

>> of the 17 senate races, republicans won 13. democrats won three puree go -- won 3. john boozman won by 58%. he is currently completing his

fifth term in the u.s. house of representatives. in pennsylvania, the republican beef the democrats by 51% -- beat the democrat by 51% pure a good watch c-span for continuing political coverage -- by 51%. watch c-span for continuing political coverage. next, a look at consumer health care -- the future of health care and then a look at consumers and health insurance. tomorrow on "washington journal," paul came looks set the agenda for this month's lame-duck session in congress. the republican from utah talks about his election to the senate, the tea party movement,

and the dallas budget commission. and hansen clark discusses his election and leadership from the democratic party. see what people are watching on c-span video library with the most recent video, most watched the video, and most shared. it is on our home page. you can view our continuing coverage of the midterm election. watch what you want, when you want. friday the alliance for health reform and the johnson foundation looked at how the republican majority's might change health care policy. speakers include an official with aarp as well as the top

health care adviser to the senate majority leader. this is an hour and 20 minutes. up here. the opportunity for everybody to have gotten lunch. so why don't >> i am dead howard with the alliance for health reform and not -- ed howard with the alliance for health care reform. want to welcome tow -- welcome you to this session about how last week's session might affect t new health care reform law and other health care issues. i also want to acknowledge the co-sponsorship of the robert wood johnson foundation. unless you are brand new to health care, you know that rwj is the largest philanthropy in america doe -- devoted to health

and health care. they want americans to lead healthier lives and get the cae they need. brian quinn was planning to be with us, but had a late conflict. i know he would be happy to try to steer you to what you need for many of the programs that the foundation has in both health and health care. and if yo don't know him, i want to point out bill ervin, the communications director of the alliance, former charlotte observers reporter, he would be happy to help you identify sources, track down contact information, suggest story ideas. he's the go-to guy. i should tell you the briefing is being broadcast by c-span. so please when you are asking a question if you would wait for a microphone to arrive at your place, and identify yoursel and

try to keep the question as keep as you can, so we can get to as many as possible. we will have a transcript of this briefing available in a few days on our web site at allhealth.org. that's all of the ovehead that you need to get us into this discussion. we have a high powered panel here to respond to your questions today. i'm going to inroduce them very briefly. there's more extensi information in your package. then the show belongs you to. he's a resident scholar at the american enterprise institute. he knows more about congress than members of congress know about congress. >> that's not way of -- not saying much. >> low bar. >> low bar. yes. he writes a weekly column for

"roll call" that a lot of senators read. he's a student of,and expert on how government works. at the far end is dean rosen. he's a partner in the public affairs firm of melman, vogel, castaneti. he was the advisor to senator majority leader bill frist, at a time when he was the vice chairman for the alliance and health care reform. next to dean is john rother, the executive vice president of policy, stragy, and international affairs for aarp. he has also spent a number of years on the hill working for jacob jabit and john hines.

i should say john the new board of directors. he's sort of my boss. whatever you say, i agree with. let me get started with an international question. as i say, as soon as we get some responses from our panelist, we'll open it up to you. and it's pretty general. and we've had a lot of successful republican and house and senate candidates saying during the campaign that they wanted to repeal or maybe repeal or replace the new health reform law. some others said,well, that's not going to be possible. pointing to the democratic-held senate and the possibility of an obama presidential veto of ny repeal bill. hey focus on -- depending on who you listen to, defund and delay among other littertive

suggestions. what's your best guess, john, how the congress is going to deal with the new reform? strike it, or try to do something else many >> let me say in the interest of time, i'll dispense any usual comic monologue. those of us who writes jokes about politics and politicians, just to step back for a second within -- second, we've had the three waive elections in a row with the status quo and all of the actors in washington. bra yourself for a wave sometime, probably in two years, who gets caught in the under wash remains to be seen. that means a brittle and difficult environment for almost everybody out there. and in the short run, meaning

the next two years, one the real sets of tensions for president obama, now facing a very different and combative congress is also the challenge from his own base from the left. i was particularly struck election eve when russ feingold, one of the incumbent losers said, it's on to the nextbattle in 2012. which could be many things. the obvious one would be a challenge from the left to the president. that means that every issue that comes up, the most recent being how to handle the bush tax cuts, as watch with close scrutiny by his base. he has to be careful on that front. at the same time, as we talk about the health care issue, the really interesting set of dynamics to watch is within republican ranks. john boehner has basically called the health reform package an abomination.

he's called for repeal and replace in a speech that he gave at my institution before the election. he talked mostly in cautious and prudent terms in how he wanted to change the dynamic and atmosphere of the house. the second question was health reform. he got very animated. he said we're going to cut it off at the knees. we're going to cut the funding. the first thing that we're going to try to do is cut out and eliminate the $550 billion in medicare. i remember the great debate in the reagan years where republicans went ballistic every time that democrats talked about cuts. he said these aren't cuts. they are a slow down in the rate of increase. now they are cuts. also, because it put republicans in a way, because they were in the health care debate, in the funny position of defending every dolla of medicare into perpetuity. that's going to come into

conflict with the new members coming in, balancing the budget, cutting spend, and fiscal discipline. at the same time, the initial talk of repeal was replaced by repeal and replace. but i think there's a real dilemma here. when you tart to parse out the individual provisions, most of them are quite poplar. the one tha isn't popular at all is the individual mandate. but if you take out the individual mandate and do as most republican candidates out there, and as the leaders have said and make sure that, of course, you are going to keep the ban on preexisting conditions, you are left with an impossible situation. it was striking that when karen mcanni, the head of th american association of health insurance plans made her first overture, she said it required

universal coverage. how we get around that is interesting. it's going to leave some people disappointed. you can't defund the program. to do so, you have to give bills that still pass and cut out the funding. and since most of it doesn't take affect for a while and get the bills through the senate and sned by the president. that won't happen. you can retard the progress. you can end up with a show down over the labor hhs appropriations bill. and we may see a number of shut downs, one the shutdowns must be the selective on. if you shut down hhs, you shut down all of hhs, you shut down cms, nih, a lot of things that people may not find very comforting.

and republicans leaders who remember the last shutdown, and the disastersaying they don't want to have that happen, they may not be able to control it and a new members who expect them to take a meat ax to it. they are oing to try to mix up the information is to call kathleen sebeilus, secretary of hhs, in to testify every day. the committee chairman says he wanted to do 280 hearings this year. we're going to see requests, subpoenas, not requests but demands for documents and more documents. let me just mention one final thing. i believe one the first acts that we'll see in the new congress, they are going to stop extending unemployment benefits. that's going to have real implications and repercussions for health in the states. i suspect it's going to increase. you argoing to get more people

going to the emergency rooms back, end you are going to have the states which are already strapped for funds coming to washington and says hey, if you are going to do this, you got to help us out. that includes a waive of new republican governors. they are not going to find much help from their compatriots on the hill who are focused on slashing the budget who are providing welfare for heir friends in the states. >> pretty good of calendar of things to attack and look for. now we'll turn to dean rosen who is going to tell us why all of this can be worked out. >> well, thank you very much. and thank you for inviting me. i'm not sure i'm going to tell you how it can be worked out. i'm happy that i don't have to follow any of norm's jokes. that's the main thing. let me, i guess, first say something broad about how in fact reform played out in the elections. and i'm sure we'll get into some of the bigger dynamics. and i'll try to respond to what

i -- to your question, what i think -- how republicans, i think, are going to grapple with the repeal, replace debate. leadership elections will be next week. all of this should be taken with a lite bit of a grain of salt. but i think the first thing, if you look at the election, i think this is how the new leadership in the house and returning republican leadership in the senate will look at it as, you know, you can look at the polls and take different lessons from them. for me, i think the clear message of the selection was about jobs. and the economy. but i don't completely buy the white house explanation that if it weren'tor the poor economy and unemployment, we wouldn't be in the situation. i think there was also some very strong message about voter concern about government over reach, and the size and scope of government, and deficit spending that if you look at some of the polls and you look at some of the outcomes, it was more

significant than at any other time, even back in 1992. if you look at the deficit as a percentage of gdp, and also in real dollars, you can see why people are concerned about it. i think in terms of health care though, you know, you can -- depending on how you ask the question, you get sort of an even split when you ask voters do they want to repeal the law or something else. when you ask people whether they were sending a messageabout health care pro and con and you look at the tremendous vote among independents and others who voted were people were concerned about it. i read the election results in general. i think republicans will look at folks who voted for them and sent them to washington as a repudiation of the health care law or at a minimum significant concern about the direction. yes, the are voters who want to grow it add a public option. i think the verwhelming message from independent voters and others is that way want to scale

back, if not completely repeal. but i think in context, where does that fit in, and for me, health care reform and again, i think the election results translate into how folks will interpret those and how they might governor really were two things. one, i think they were symbolic of the overall message of government that has grown too fast, spending too much, trying to do too much. while people are probably not voting over the particulars of health care reform, clearly, and john will talk about this. some seniors were concerned about medicare cuts or reductions in growth or spending. whatever you want to call them. for most voters, i think it urhered a narrative, this is a big spending bill. $1 trillion bil. even if it's offset by tax increases or cut it's still a bill for government. it furthered the narrative. i think the second thing for me,

i got outside of washington and talkedto real people, it also became a symbol of an administration and a congress that wasn't aying attention to what the american people felt were job one. which is to deal with jobs. and the president for however articulate that he was during the campaign, never really seems to hit on a messa that connected health care in a meaningful way to the american people and to voters as addressing their concerns about the economy and about jobs. and so it looked to a lot of people, again, it furthered the other narrative of, you know, over reach, yes. but you took your eye off of the ball of what we wanted you to do. so when you look at it, and you look at the new congress coming in, you see a significant majority and there are some commentators, norm, it will be interesting your coent on this. but when you looked at the senate about a year ago, you would have said that republicans had a real uphill battle. they were defending more seats. so in some cases, you can say

that, wel, if we would have had this candidate here, a different candidate there, maybe they would have picked up another seat or two. that's probably true. on the other hand, if you would have told me as a republican a year and a half ago we could have deended all of our seats by really bing margin in places that have been close in the past in florida, ohio, and won six of those. i would have taken that bargain in the house, looks like there are 62 new members with a couple of races undecided. what i think folks focus on and should focus on is that because of retirements and other things, there are actually more than 80 new members of the republican cauc. about 1/3 of the republican caucus, the majority there is new. so they are -- and of those people, i think by my count, there's at least 35 of them that have never held any kind of elective office.

not congressman, not dogcatcher. these are people who come to washington, maybe not with an attitude of let's go along to get along. they feel like they are here to make real change. what they mostly campaigned upon, in terms of health care, was repealing the la and replacing it with what they would say is common sense reform. i look at that, i look at the pledge for america. i look at the outcome and i'm one of those people who believes in this day and age, when you campaign on, you say you have to do. i think to awer your question, my sense that republicans in the house are going to have to have some kind of a vote. whether it'll come in the first week, first month, first couple of months, i think they are going to have a vote that repeals the la. they may replace some of the provisions in that vote. senate votes or bills to show whathey are for. all of the reporters who write on this, there are a number of

legislative proposals that have insurance and other things they will point to and i'm sure reintroduce. i think they'll have a vote in the senate. i think there are a number of members in the senate unlike this last election, thereare now 23 democrats, a majority of those up in the senate are democrat who's are defending seats. a lot of them come from big square states in the middle of the country that voted for john mccain and george bush. there maybe in a senate that's 53-47 essentially, three or four or fiv of those folks who might vote for repeal if it came down to a repeal vote and again in the senate amendments generally n't have to be attached to germane legislation. it could come up on a energy bill or tax bill. there will be that attempt. clearly the presiden is going to veto that. i think the question is, what do they do next? and i kind of put it into three

categories. i think rather than an either or, i think they are going to do all three. i think that are going to investigate, legislate, and appropriate dealing with the appropriations process. i take in reverse order. in terms of appropriations, there are things that you can do. i think sort of shutting down the entire government. you can attach riders and say that treasury funds shouldn't be spend to enforce the mandate now that it's enforceable until 2014. they already ramping up. i also agree they have to be very careful. i have personally not viewed the appropriations route as the most ffective route. i think it's one route that people will look at in terms of investigate, we talked about this. there will be a lot more oversight hearings and i think as y'all know, there was a lot of frustration that secretary sebeilus didn't come up and

testify before the house and senate, accept in one circumstance on another matter. i think that will change. i think don berwick, he'll have another hearing next week, even max baucus said he thought it was not good use to the president's time to reappoint him in a recess appointment. what are they doing in the response to law? so i think we'll see that. i think the third thing will be in the legislative arena, and the waythat i would look at it is that rather than a strike and place, after they have their vote and make their effort, i think what we'll see is a series of surgical strikes. and maybe going after things, norm mentioned one of them. the individual mandate. we can talk more about the

substantive implications. but that clearly is unpopular, more than that, there's the state lawsuits that you can point to. i think they'll go after the independent payment advisory board potentially. i think they'll look at some of the industry fees and taxes which you can argue were-- offset the cost of the bill. but will very likely drive up premiums if you tax the underlying cost of care, they are going to go up. i think they'll look at some other programs, some of which will save money and others of which might harm the bill. whether they are successful with a president that still holds the veto pen, we're among among -- obviously that's an uphill battle. but my last comment would be, i think that in anything, the next couple of years beyond what are legitimate takin the republicans at their word legitimately and what they will do, in terms of trying to attack the law are also going to be an attempt to keep alive in the mds of voters those things about the bill that they don't

like. for me, the xt couple of years in some ways, become about the 2012 elections. which are -- i gue started o november 3. and in part become aout 2013 when there maybe a new president in the white house and maybe more seats in the senate in the reblican hands and reminding all of us that many of the provisions, while they are under way, the insurance reforms and new subsidies don't take affect until 2014. that becomes the real fous is keeping this alive, even if they can't make changes this year because of the president, trying to be in a position to really make some of those substantive changes in 2013. so i'll stop there. >> john, how does this strike you? either from the institutional point of view, or from the political poi of view, or any other? >> thank you for the opportunity. it's a real pleasure to be here

with norm and dean, both of whom i respect, and today, agree with. [laughter] >> now that everything has been said, i guess not everyone said it. i'll try to put my own terpretation on this. i do think it's easy to over interpret the election results for several reasons. and to over dramatize that the potential impact on health reform. first of all, the people who voted last week are not the same as the people who will vote next time. there are many fewer of them, many of the demographic groups were much less represented as is typical in mid year, and i think the -- to pick up where gene left off, the election isn't the one we just had, it's the one we will have in 2012. it'll be a different electorate. the second point is most voters today, perhaps understandably, say they are confused by health

care and what is in the act that could affect them. there are many messages during the campaign. unfortunately, from my perspective, many were designed to scare people, especially seniors. but it's understandable that there's confusion. it's a complicated act. it comes into being piece by piece. so the next two years will be an opportunity to help people understand more clearly how it might affect them. i don't think that you can say there's a mandate out of congress to spend a lot of emergency on health care. i think there's a mandate to spend a lot of energy on the economy. i think there's a poll in the paper this morning that shows that a small minority want congress to focus on health reform as opposed to the economy. i think that's going to play

itself out the more that people try to focus on health care and people at home might say, well, okay, what about jobs? and congress is going to have to respond. i so think the's no mandate at all for an alternative approach to health reform. you can see that from the polls. they -- elements of alternatives are not particularly popular. and many provisions of the affordable care act are popular. so you have an act that's very interdependent in it's design. it would be extremely difficult to start polling t apart without as dean said either raising premiums or increasing the deficit substantially. i think as people start to confront that, we are going to see more and more caution about changes. i also think that politically,

provider groups are still quite supportive of the act. doctors, hospitals, insurers, drug companies, where still supportive of the act. i think there's good reason for all of those people to be supportive and those interest t be supportive. i think again that'll tend to temper the debate. i do think that the benefits of the act have not yet been appreciated. particularly for people who need improvementsthe most. the people who are chronically ill, the people who are frail, children, i mean there are some very important advances in the legislation that would seriously improve the siation of people who e quite sympathetic to the public. and the more attention that they get, in terms of that improvement, i think the more

impact that will have on the tone of this debate going forward. i would conclude in much the same way that dean did, in that the real battle here is not so much about legislation in the nt couple of years and not really about appropriations, but really about all of the hearts and minds in the american public. investigations are going to be a tool. but that can happen on both sides of this debate. and the election that matters is going to be 2012. when i think we'll know the answer after that as to what the future is for health refor >> okay. thank you very much, john? we are now at the point where we are actively soliciting your questions. let me just say we also have had even before we knew that there would be c-span coverage, we've arranged a teleconference for reporters who are outside of washington, d.c.

and we've given them contact information so that if they have a question that they would lake to have -- would like to have asked, we will try to get it responded to. i'll remind you that the e-mail address to send your question is questions -- wi an s --@lhealth.org. have a microphone. please identify yourself. >> my name is mark, i write for medical device daily which telling you something about my orientation. the medical device tax of 2.3% pails in comparison to a lot of similar issues in connection with health care reform. i guess the question here is whether it's going to sort of disappear into theweeds there. some members of the senate from minnesota, for instance,

klobuchar and franken have obviously orientations. is it just too small compared to the other things to garner any attention for the next two years? >> i think one answer is republicans are going to try to get soe traction by having individual votes on individual pieces. every part of the revenue component of this is going to be attacked, and some of it will be attacking tax increases. and clearly with an attempt to lure some democrats over. we may get some votes. my guess is they are more symbolic than real votes. that either this will be in the context of bills that will end up possibly being filibustered by democrats. in some cases, you may get republicans joining a hand full of democrats to support something. and the core of democrats will say we're not going to let that happen. others will move into a conference and try to take care

of it there. which may mean more potential gridlock and an ability to come to an agreement or it may get to a presidential veto. but i'll probably be a little -- i'll be immediately surprised if that medical device tax got removed. >> i'll just add -- two quick things. i think the medical device tax points out two interesting sort of broader questions. i think that become issues that republican leadership is going to have to grapple with. one of which is, you know, how do these -- how do any attempts to change the bill at all -- how are they positioned? so, you know, i think that republicans and the democrats who support modifying or repealing that would be probably less successful by portraying that as something that's going to help an individual industry by relieving a burden from devices or other folks. but as i sort of implied earlier, i think that a number

of those industry fees and the device taxes is one the clearer examples. i think it can be portrayed as things that are going to, you know, increase th cost of under lying products, and, therefore, translat into higher as opposed to lower premiums as one the goals of the bill. i think how that vote and others get positioned is really important. i think the other thing, we don't completely know yet and norm and john may have a view of this, but in the past, under at least republican control, for many tax cuts, pay as you go budget rules generally did not apply. it'll be interesting, when you look at the republican caucus now in the house and senate, to me it's unclear. will they say they have to pay for tax cuts or not? if they don't, and they hold the sort of traditional republican view, we have to pay for new

spending, but tax cuts are returning money to the american people, if ty don't have to offset those, i think it makes it easier to have a vote that pulls over some democrats to reduce the impact of those fees. one thing -- none of us talked about. i think one the over riding messages coming out of this election. we saw this earlier this week with the initial propro sal from the entitlement commission is the concern about spending. that's going to have to be balanced against all of the things that might need to be offset potentially. >> do you think that the reblican rule changes that are now under consideration are going to make it easier to do that. is that what you are eluding to? >> i haven't beenprivy to that. norm may know. >> yeah. they are talking about their own sort of first of all adeptation

of the you cut plan. they are will advice from callers and listeners all around the country. they are clearly not going have a paygo that includes revenues. how in the end you reconcile that with the desire to reduce deficits and debt remains a big question on the table. it's a question that has now been brought into full relief. as have some of the full issues of medicare and social security. alan simpson and mr. bowles have put things out there that are creating discomfort in both parties. >> and you raise your -- well, we have someone here now. >> hi, i'm julia mcdowell, i'm the editor of the college of american pathologist. can you talk about how you see the new congress dealing with the physician payment sgr issue?

>> well, i'll take a crack at this. this is one of our top priorities to reassure seniors that they will have continued access to their physicians. and we certainly hope that the lame duck session will tackle this. it's an area where because it's new spending will probably have to be offset elsewhere. i think the only reason that i'm not more confident of the result is not because of the desire to extent the sgr, it's the uncertainty about what the offset would be. and hw possible it would be to go forward. but we are pushing very hard to get congress t act very quickly on this. because they need to do something by the end f november in order to prevent disruption. >> you know, the deocrats in congress now in a lame duck are

going to be tempted to kick this can off into january. precisely for the reason that john mentioned. they can't just let it drop. because it brings, you know, something close to catastrophe for physicians and for access in coming months. but i think tey'd rather leave the very difficult choice, because there will be a paygo provision on spending for what to do with what is a substantial sum of oney to the republicans in the house to deal with. >> yes. >> i'm jim of health reform week. one the provisions in the reform law that seemingly could be somewhat vulnerable could be the insurance exchanges sice they don't start until 2013. i'd like to ask the congress what they think the congss either by funding or other means that would interfere or prevent the changes from starting up in that year. >> i'll take a first crack at

it. i mean i think -- i think again with -- to john's comment that so much of the bill is interlocking and the exchanges are clearlyyou know, one of those mechanisms. are they absolutely essential? probably not. but th are clearly are integrated with things like the forum and subsidies. i start with the premise that any change, other than things like on the marge -- margin but ptant, like the 1099, the president is going to be resistant and veto if it gets from the senate to the desk. i wold say given that there are some kind of wholesale repeal of even the exchanges is going to be unlikely. what i would say is as the governors begin, they are already under way to sort of look at legislation, look at the

guidance that maybe coming with washington and with republican governors picking up more seats at the state level and republican controls more legislatures at the state level. i think what youmay well see, this is another very interesting area in terms of the role of the states. they have a huge role in terms of implementation with the exchanges d other things. you might see it bubbling up from the state level. real concerns about some of the regulatory requirements and other things that might be dictated to the extent that th have flexibility to make changes. to the extent they feel like they don't have flexibility to make changes. i think what you might see if the issues get ripe enough is some surgical strikes or targeted attempts to maybe make some changes to the exchanges. i remind folks that again sort of the leaning republican house alternative, there was a form of exchanges there. it's not a -- it's not necessarily a democratic idea. but the details as in many of these things are very different.

>> yeah, just quickly. there are two states today with exchanges, massachusts and utah. they are very different. one is more regulatory approa. one is more passive. and i think that's the question going forward is which model and since it is a state by state decision, i don't see this being relitated as the federal level. >> i would say the one caveat is we're going to see some guidance based on press reports and other things in the coming weeks from the administration. i think again to the extent that the governors feel that the requirements are too strict, you know, the alternative is to just say we're not going to do this and let the federal government do this. that maybe an option. the extent that they want to d this and keep control, i think you could see them saying we think it's a god id. we want to go forward. the rules that we are laboring under from the law or regulation or both are too onerous. we want to see the change.

>> a couple of dynamics here, they campaigned in a very hostile way to the health plan have really talked about boxing up the exchanges. not using money or their discretion. it's going to be an interesting channel, i think, in many of the states to figure out how you can keep from disrupting your own citizens and make your political point beyond filing lawsuits or amicus briefs. it's actually more of a repulican ways. in some fashion to bear. the main republican aternative has been we don't need any of this. we have to let people shop across state lines. buy insurance across state lines. the real danger is it works in the way the credit card works. the race to the bottm. you just look for a state that as the least cumbersome regulatory offer, the poorest plans. and e alternative to that

might be if you did get some bipartisan give and take is to return to the national exchange as one option here. that, i think, in a world where parties actually talk to one another, might be on the table. since they don't talk to each other,it's probablynot. >> okay. we've got gentleman right here. then i've got a couple of questions from around the country. go ahead. >> gregory talkman from the pink sheet whichis from the pharmaceutical industry. two questions, one similar to the question on devices. what drug provisions that you see might be targets going forward? and second question related to the patient center of outcomes resech institute, how much is that? and do you see any changes that might be attempted to that body? >> let me say to our panelist,

we've had a request from one the reporters on the phone to identify the panelist before they speak. who would like to take a crack at that? >> that would be me. this is dean rosen. i thinwith respect to the to th- to many members, if yo look at debate, there was general agreement among the republicans in looking at research. there were concerns about some of the dividual provisions. i would say, you know, that probably is on the list. but i'm not sure it's at the op of the list. i think if youook at the boards and commission that ar out there, i would put the independent payment advisory board above the outcomes research institute as something that would be more likely to be targeted. but again we'll see. new members are going to come to washington in a couple of weeks and they will have their views on how they want to proceed. with respect to other provisions on drugs, i would say maybe two

things, and john, who is at the table and a lot of the bargaining and discussns might have a different view on this. i think that with the device tax, it was clear that tht was really done not with a wholehearted agreement of the device industry, but the fees on the pharmaceutical industry was a different matter. it was part of a negotted settlement so to speak. i think that one maybe less likely to be undone. and certainly th industry might be less likely to go to congress and, you know, remember we'll still hav a democratic senate and president. those were really the two party that is drove the agreement. let's undo what we agreed to. i think that's probably less likely. what i would say is that there are a number of provisions in the past that one of the things that pharmaceutical industry was able to do very skillfully, i

think, was to keep out of healt reform a laundry list of things that could hae hurt the industry more and i think one open question is whether some of those things, particularly iv republican control are mild and maybe back on the table. in the sense there maybe democrats who are congress that might want to do it. there might be new republicans that hav different positions than republicans in the past have had or others in theame of deficit reduction that are maybe open to ideas that they might have foreclosed in the past. for example, you saw the deficit commission proposal, again, just a proposal earlier this week, proposed to extent the medicare rebates to the low income population in the medicare program. so maybe in the name of budget savings and others, there maybe more receptivity to thse kinds of ideas even in a congress that's now divided. >> this is john rother, i could just add i thought it was significant that the ceo of

glaxo came out calling for health reform to go forward. i certainly gree with dean's point. this is a negotiation in which the industry won quite a few concessions. and if this issue is reopened, i believe they may end up doing worse. particularly in light of recent price increases that aregoing to look unappetizing to anyone concerned about the deficit and the cost of ealth care. i think there will be -- if they reopen this, i think there will be --more pressure on the industry rather than less. >> yes, norm. >> this is norm ornstein. always keep in check we're always at a populous anger. it's the search for scapegoats. it's a dicey or delicate time,i think, for everybody in the various industries.

the danger that you are labeled the next scapegoats. it doesn't necessarily happen because you are the gredy bastards sometimes you are a first one in the line of fire. that's what happened to the health insurance industry. it's also going to be -- i think, going to put some pressure on the white house. because the temptation there is to push the blame off and sometimes it's deserved. but you can lose allies in this process who have helped you get throuh th if you ar not a little bit careful. but the industries, and i think this is the phamaceutical industry, i think any objective observers would say came out quite well in there. they were smart to get in early. they got a lot out of it. billy took a lot of flak from many within their own industry who didn't understand that he knew what she was doing. i just would have a hard time

imagining they would be foolish engh to reopen this in a way that would bite right back at them. >> yes, sir? >> merrill with the fiscal times. you raised the possibility there could be some tweaks in the president himself after today in the press conference say we may look at the 990 issue in the $600 that small businesses will have to fil forms. are there some other things, i'm specifically thinking about the mandate that democrats might decide might be worth taking a look at. this is after all, the economic industry in which the insurance industry is a primary receptor. is there the possibility that democrats would peel off and do that. president obama, as candidate obama, didn't back the mandate. >> i do think this is actually

is one the biggest problems to start with the republicans have. because the temptation is going to be to go after th mandate. americans don't like mandates of any sort. but you can't do that and keep the other provisions that are popular without having a lot that unraveled. and you maybe right. some democrats might join in out of mischief. the insurance industry would be the first up to the plate saying you can't do something like this. taking a look at the mandate, and taking some ajustments, including, taking a look at some of the penalties for not getting insurance are adequate to the task maybe in the light of the massachusetts experience and others. that's something that you may want to start to look at now even before you actually implement it and then do over sight. >> this is dean. i would say i have a different political take than norm. i think the mandate is a bigger

problem. if the republicans in general don't want the legislation to work, i'm not sure why they would care if one the provisions that was really unpopular kind of unraveled the entire ball of yawn. i'm not sure there's as much risk in that they ae invested that may give them an opening to come in and do something more likely -- more there likely in the futue. i'm not sure there's the huge political ris expect to the extent that it may raise cost under the current structure. they don't buy int the current structure. i would add i think there's some other things in there. we talked about the individual mandate. and there's -- tat's essentially, you know, a tax enforced. there's also a whole series of corporate taxes in here. you know, not quite a mandate, but a pay or play kind of requirement. even for those employers that are offering coverage. those are going to be at the heart, the substantive

provisions that's going to be at the heart. which iswhat are emloyers doing to response to taxes in the future or maybe a penalty at's less than keeping their coverage. you've seen some of this already with retiree coverage. i think to the extent that maybe -- that might be vulnerable again. the president may veto it. where you can see in the name of corporate tax and overall cost of doing business where you might be some attempts to go after those and losen restrictions on other things that are constrained to a extent in the law. >> we'll have a quick comment. i do not think the insurance indust is the major beneficial reof the mandate when it's paired with the minimum loss ratio that will get tighter over time. i do think the people who really win because he mandate are older people who are age rated against today, sick people who are excluded today, people who are suffering because of the failure to bring everybody into

the same pool. we eliminate the mechanisms to do that, we're going to have a very difficult time protecting the people that we most want to protect. >> and this is norm just getting back to dean's comment. i think what i would be afraid about if i were republicans, if you go after that provision, and it unraveled, that means that you take away the popular parts of the bill that people are looking for. and your the ones who did it. so it's a little bit of a danger there. it can unravel in a way that causes some level of chaos and it will be pretty clear what caused that chaos. >> would it unravel quickly enough to hppen before the 2012 election? you tnk? >> well, some parts of it could. this bill was designed for a variety of reasons. to try to provide goodies before the disuption occurred. you can imagine, especially if

you have a clever president. just as we saw with the shutdown that ended in 1995, you can make sure it's causing pain to people in a way that there's a direct connection with the actions that immediately proceeded it. >> i would just add one thing that dean rosen that we haven't touched on either. which is the state lawsuit that is are going forward. and, you know, i think initially, there were a lot of smart legal scholars and others who discounted them. the fact is a couple of those cases are still alive. you know, the one thing that we don't know, the courts are inheritly unpredictable place. you may well see the results of those lawsuits havingsome impact on how these are written. i think that would be a nightmare kind of scenario for the president to have the outcome of a court case thrust really a popular issue back and have them have to defend it, and then we -- i'm sure we'll

probably see the larger repeal effort first. and it maybe that the republicans wait for the jut come. i'm n sure they will. they may wait for the outcome, or at least more clarities among the lawsuits before acting on the individual mandate. because i think we can't discount the potential impact that those might have too. >> i agree with dean. and i do think we all ought to be looking ahead. here's one substantial possibility. whatever happens at the district court level, this issue is going to the supreme court. we knowthat. and the part of the bill where the constitutionality is most endangered is the mandate. that's the core of the constitutional case. it's an over reach of the commerce clause too force people to do things that they don't want to do. there's a strong case to be made that's especially given that te burden for those who don't have insurance calls on the rest of us because it adds to the cost

of health care that the rest of us have to pay. but i can imagine a scenario where a 5-4 vote in the supreme court with the predictable five over turns a major act of congress, an initiative of the presidenthat takes us right back to the court of 1933, '34, '35. and a constitutional confrontation in a way that has unpredictable outcomes, not in rms of the policy, but the politics. the idea that they do this is going to be portrayed in a political arena in a way that goes beyond whatever happens in the health care bill. >> let me take a question. this is from sarah at myth -- politico who's listening. it gets back to something norm

and de have mentioned. that's notion of the potential shutdown of a governmental agency like hhs. the question as written is we know that mitch mcconnell has said it would not come to that. but she's curious if you think the influx of new members who want to repeal, aggressively, would lead to this kind of a situation? how likely is it? >> well, this is dean rosen. i guess my view that i don't think it's likely. but, you know, like everything else and divid government it might be possible. you may not have -- one difference that i would, you know, remind everything that in the last shutdown, republicans controlled the house ad the senate. this time, there maybe attempts to sort of work things out a little bit more out of necessity because you are going to be --

before it gets to the president to force a shutdown, you are going to have to have some agreement between the house and senate on what they are sending down pennsylvania avenue. but i think, i might answer and just take a bit of a broader view which is, you know, we're -- i think one caveat for the whole discussion today is that to an extent, almost all of us in the room are focused on health care issue and i think back t the lesson that i think democrats have not quite got yet out of this election which is it was about jobs. it was about the economy. and i think norm sa this earlier. health care, i think, is a very clear example of a lot of things that voters were reacting to in this election. it's not the only thing. it's probably not job one. so i think that we have to remember that. i think as a result of that, i think, you know, leader mcconnell and others were, had

i thought a great deal of humilities coming in and saying, we have to remember the election was a part on referendum on the president, and not necessarily a vote for the republicans. in the same way, while the republicanneed to raise this, keep it alive, and do what they said they were going to do, and have to balance the need to not look like we are focusing the entire next bill on health care. there are a lot of things that are connected which are a big deal as well. >> this is norm. you know, i would -- we've a few potential scenarios here. let me start with what i thought was an extraordinary comment from the likely incoming speaker john boehner for elction eve. either he hasn't read his constitution in a while, or didn't get terribly adequate civics education back when he was growing up in ohio, or he

has a different point in mind. because the constitution says it's the congress that sets the agenda. it's the president that disposes. but we are going to get into a kind of elaborate blame shifting game here over who's actually in charge and who's responsible for some of these problems. we know that republican leaders are trying to down play those expectations not just for the public at large, but for the new members coming in. they want o manage the new members, rather than have the my members manage them. they don't have government shutdowns, because the presidet has the advantage under those circumstances. the fiscalyear thatbegan october 1, not a single appropriations bill. we have a continuing resolution that expired on september 3. it's not clear we are going to be able to get through the lame duck session. you move that into january or february, you are going to have a lot of determined new members o want to take a meat ax to

spending. and the idea that you keep last year's level going for a substantial period of time is not something that we are looking for. that's one to place for a potential shutdown or disruption. it might be a short one. it might not. the debt limit, the ceiling will get reached sometime around march or april. we have new members coming in that they simply did not vote to increase the debt limit. the only way they wll vote to increase is if we've already radically cut the sizeof government. that's what precipitated the shutdown at end of 1995. and it might come much earlier. then we get the issue of health care. it's not the dominant issue. dean is right. i think we all agree on that. as they attempt to use the appropriations process to limit the funding, imit the sending for implementation of different elements of the plan.

: of hhs and other agencies. and as obama managed to shut down so people want are the ones that get disrupted it could have some material interesting politics in play. a lot of people whodon't want a

shutdown may be forced through things beyond their own individual control or because they can't control their own members and to actually happening. >> good observations. a gentleman here would like to ask a question and she has the microphone. i'm sorry. >> this is lucia with the washington post. some of you mentioned earlier the commission's proposal, which was released on wednesday which called for a long other things, capping the growth and federal health spending. could any of you speak on how this proposal might affect future healthcare? [laughter] >> this is norm ornstein. it's hard to thcourts of the commission's proposal is the co-chair, the chairman's mark right now which in part may reflect the fact they don't have 14 votes at this point for anythi and of course it would

be a minor or even a major miracle if they ever did get 14 votes out of the 18 members of the commission who really do span the entire political spectrum there were a few things about it that were striking. one is an attempt to put a cap as a percentage of gdp on spending and health is included within it. the other is it basically accept the health care plan and moves to make adjustments from within that and that is one of the main reasons that some of the republican conservatives members of the commission and people outside have been critical of. within that it also tries to take some the provisions that are in the bill esigned to bend the cost curve and tighten them up and make them more firm, and, you know, from that perspective i would view it as a very constructive approach. it takes some things that perhaps weren't as tough in the bill as ey could have been and made them tougher. there will be a lot of people who don't like the approach to health care who don't like the

idea that you start by accepting that status quo. >> didn't i see somewhere in there there was a public option -- [inaudible] >> but i think that norm is right about the effect that it probably pulled me get out of the commission. but i think the one thing to kind of keep an eye on is just because it doesn't get a super majority vote doesn't mean these ideas are dead forever. if we look at the medicare commission that came out of the 97th balanced budget act and some of the proposals including the drug benefit and some of the competitive elements with medicare raising the part b premium and other things were ings that live on, and a number of legislators who participated in that became interested in those ideas. here it's hard for me to see this hanging together, and i think as norm pointed out, one

of the fundmental to walls from a number of republican standpoint is that it does sort of deal with some of these other things like speeding up or putting more teeth in that doesn't deal with things like should we be, you kw, expanding medicaid to 133% of poverty and tacking on a trillion dollars of subsidies to a new health care spending at a time of fiscal concern. i think there will be an issue and on the democratic side we saw jan schakowsky and others come out in opposition on the entire plan, and durbin. so will be interesting to see if the floor ideas of caps and on a macrolevel continue to be part of the debate >> i would like to add on. one as you can on deal with a deficit without dealing with health care long term. health care is the problem long term. and thsooner we get serious about it, the better. the affordable care act made

some important steps but it is by no means the whole answer. so why do give the co-chairs some credit for at least not ducking on the issue. however, i do object to the specific proposals, particularly the ones that would cost shift more on to the beneficiaries because that doesn't do anythg but lower the burden of health care and the economy from taxpayers on to sick people which is really regressive and not the way to keep healh care affordable for people going forward. in fact it's just he opposite of the intent behi the affordable care act so i think while they should get credit for being willing to take on health care, i really think they made a misstep in how they recommended doing it. >> we've got this gentleman and somebody over here, too.

yes, go ahead. >> hi, i'm david -- and david vandenberg from tax analysis and wanted to follow-up on something you quickly discussed earlier and that is the 1099 filing requirement. the president has indicated a willingness to revisit it. do you anticipate anything being done about this in the lame duck or the 112th and -- talk about that. >> that's a gonner, but the interesting question that remains is how do you replace the revenue. and i think the preference -- it's not clear how mh they are going to be able to do in the lame duck. they are already talking about narrowing t focus. there are some big issues that have to come up because harry reid promised during his campaign to bring up the dream act, for example, and there are other things close to the finish line where there's actually been broad support, the food safety act for example, maybe the

disclosed act as well. they would like to do this now actually. they would like to get something that is widely viewed as noxious of the table but they've got to find another funding source for it, and i haven't heard much on the front. okay? yes. >> hi, doug trap with american mecal news. this might be a good closing question. republicans played the role of the minority much of the last congress. can they still do that in the next elections or do they have to actually produce some results to justify, you know, having more nmbers in 2012? >> well, norm, actually we have a couple of models here that are going to be interesting ones to see which one actually prevails. one is the 1995, 1996 model and that's the model where republicans started having swept back into power in the first

house in 40 years. new gingrich viewed himself at the beginning as a parallel or even replacement president. we saw a year of confrontation of acrimony that culminated in the shutdown and loebsack and then basically a year of harmony and cooperation, where newt persuaded his colleagues that their primary goal was to get a second consecutive term in the majority in the house, and if that meant working with the president and making things better for him, so be it. and they both won. now, you could imagine another model, and that other model is one which is basically 2008. democrats tookback the majority in congress in 2006. we had a couple of years where not much happened. it was the democrats who pushed proposals out there. the president -- they were either filibustered in the senate by republicans or vetoed by the president.

but the unhappiness over a lack of significant action continued to focus on the president, and was the president's party, despite the fact the other party had congress, that suered massively in the election. i don't know how this works out. my guess is that we may find a third model developing. it may be one where voters say for the fourth time in a row to call the ins and throw them out and throw the louts in it. it could well be one where the president basically is able to portray the republican party in a split congress and the cheers the third model, 1948, where harry truman after republicans won 55 seats in the house taking a majority in 1956 portrayed them as they do nothing congress, he won the election and they lost 75 seats.

which of the three models prevails i don't know. and some of it will depend on what happens in the economy. some of what will happen to the could depend on the leadership and whether obama can send of his own left becae what characterize his one-term president is they are challenged from the base in the primaries and they are weakened in that sense. it is very much an open question, and as to whether republican leaders can fend off the rottweilers who are on the right is going to be another challenge. >> i would just add -- i would just add that i think we will see a number of things, a number of proposals that will come from the house. and this is one of the reasons that i began with the importance of how you read the election mandates messages, at ever you

want to call them, and i think one of the clear lessons that came through a limited spending, limited government and the advantages for republicans in the tea party being so aggressive and animated and the candidates really running within the republican party wasn't helped sharpen the focus of the message, and i think that's part of the message that will come out and you see these proposals that were already said they are going to vote once a week on something to turn the size of government. i agree with norm and john there is going to be a balancing act as there is with any leadership and there was in the democratic leadership when you have a majority it means you have a diverse caucus and they have to deal with the fact, but i think as long as they are responsive to will be interesting to see whether some of those proposals get blocked by a democratic senator get vetoed by the president come and the one thing i would say is that as much as that has to do with how the president either forces the

issue or overreacts and at least from what i've seen the last couple of years i think this president is a very different president than either president clinton, and while i wasn't around in the truman administration, president truman. it will be interesting to see how he reacts on this lesson and as much as going to depend on how he is able to shape the issues and i think republicans will try to force legislation using the house when they do have a majority to try to put forward things they view as responsive to the electorate. >> just one footnotes here. every elected official is going to be judgedon one thing in two years, and that's whether they help to get the economy back and helped people get jobs back. and i that doesn't go well, i don't think any of the rest of it really matters. so i think tht let's get real here. health care is not going to be the main reason people are elected or not the next time

around. it's going to be about the economy and it's going to matter a lot who looks like they've been constructive and who hav not. >> although i will say just to add a think it is worth remembering that the two parties have a very different definition even on java's of what their response as, and so why don't think what we will see this time around is republicans agreeing thathe way to, quote on quote come get the country moving again or create jobs is by spending a lot more government money to do that in the form of stimulusr other things. and so i think they will have a set of proposals, bu they will look very different from what the democratic congress has done and have to do with things like lower taxes and so whether there is any rm to meet in the middle on those will be an open question. >> just one rosy scenario on that front. i could actually see an agreement on the stimulus packagthat would cut across the lines. and the agreement that i would imagine is one where we sit and

infrastructure bank, a public-private partnership that's already got broad bipartisan support it's the only way you're going to get an infrastructure the business community really wants investment in this area. and couple of with a payroll tax holiday and you could actually get broad bipartisan support for something that might or might not rk, but that would not just have dramatically contrasted ews of how you deal with the economy. whether any of that works in an economy i suspect is going to continue to move slowly just because that is what happens when the economy is go down with a financial crisis it doesn't create the kind of reovery and job growth that you have as a traditional recession is anybody's yes. >> okay. we have time for one more quick question. >> can't hoover, american city business journal. i have a question on the 2012 electiona well, going back to

what you all were sitting in the beginning. let's assume the president obama loses the reelection as the republican president and let's assume republicans control both the house and the senate, and then let's also assume in the meantime health care reform has proceeded according to plan. what would then have been in 2013? would there be a full-scale repeal? what they will back what has already been done or how will that play out under that political dynamic? >> how's your vision around the corner? [lauter] >> two reef reena, what with president obama do -- what would president romeny do? >> with republicans in control things -- >> secretaries hhs rosen. >> or somebody qualified. >> but i think that, you know, two years is a long time, but i think the depth of the concerns

and opposition to the current health reform always hard to overstate within the party. just look what all the candidates campaigned on and with the leadership is saying and they are relatively in sync. so i would suspect that there would be attempt to scale back, you know, outright repeal and scale back major portions. again, i would remind folks that doesn't mazzoleni for republicans that there is no health reform, that there is no subsidy, thee's no insurance reform. the would be the case the president would try to make. but i think, again, if you look at the proposals they have been across the state lines, medical liable because some of the other thgs. you can keep those ideas and whether they were and whether they are popular or not popular but they have a set of ideas and my sense is they would try to replace those ideas with ones that are now on the table. i think that the chalnge that they would have politically if

they are in the majority and this is -- i don't think we know how the issue makes the comics will change over time is at least right now you have this resounding message about spending, and i think, therefore, it makes it easier to portray a signifint medicaid expansion, for example, at a time states are already under enormous fiscal pressure as something if he were to repeal the expansion were scaled back that expansion is something that could be done in the name of, you know, fiscal relief of the states or something that could be done to address the deficit, but the wi the message challenge and a substantive challenge, and there would still be great need obviously to people who don't have coverage whneed subsidies of lower-income and so what is the alternative it then becomes important. the repeal part in some ways is easy. it's been replaced part that becomes a challenge.

but i would end where you egan, which is that i would take the republicans at least at their word and while two years as a long time, i suspect that they would continue the effort to repeal it and replace it with something else. >> let me take a crack at that. number one, we already see that issue playing on the republican side with a number of punitive candidates tripping into mitt romney for the massachusetts plan. and we have an overly what i would u.s. of course the great irony because i view the affordable care act as basically an amalgam of romney care and the durenberger, grassley, dole, chafffey to the clinton plan of '93,94. this isn't a moderate republican plan or what used to be with a group of people who are now an endangered -- under the endangered species act i suspect. but it will play out through the primaries.

what we also know is in the process of going after the democrats' plan or obama's plan, and we are seeing now we've had republicans move into a position of not only defending every dime of medicare spending into perpetuitybut also defending the employers and the coverage that they are now providing to people. where the plan that john mccain put at the table, which is has been the core conservative republican plan knocks the pins out from under employer provided coverage by turning that tax deduction into a voucher and then letting people go out and buy insurance. it's moving away from the employer provide system. there'a lot of good substantive reasons to want to do that, but i think what you're going to find as republicanin the process of trying to block or discredit the obama plan have boxed themselves into a corner

in terms of what alternatives they can pursue without creating a very significant blow back probably the most efficient way you can do things and if you notice the simpson plan deals with taxes by broadening the baseramatically and removing that tax break dramatically lowering of rats so that's out on the table is probably a good thing to do. i think a lot of people would save a step back objectively and work creating a new health care system you wouldn't run it through employers who have no expertise or interest in the intermediaries but when you are out there singing with the clinton -- lt obama plan is going to do is remove the precious wonderful protection how do you move back to that or segue into that quickly so you find some struggle with the beginning of the republican will of a threat to figure out what approach they would take. do they go laughter what they really want to do which contradicts at they've been saying the last couple of years,

or do they go with some incremental change is the kind of things we are seeing out there now, a lot of veterans across state lines provide a few subsidies and vouchers here and there it's not an easy place to be. >> we are going to convene these three gentlemen to and a half years from now to follow up on this conversation and find out which direction the rosy scenario have either direction might take. but we just thank you all for being here and think those of you watching and listeni around the country. a special thanks to our colleague at the johnson foundation for making it all possible and i'd ask you to join me in thanking our panelists for insightful and mind stretching

good morning and welcome. i'm susan dentzer, editor in chief of health affairs. we're delighted here with us this morning as we speak and hold a conversation with karen pollitz. karen is currently serving as director of office of consumer support and deputy dirtor in the office of consumer information and insurance oversight at the department of health and human services. before she joined the department she was research professor at the georgetown university health policy institute and directed

research reform issues. her areas of focus were regulation to private health insurance plans and markets, managed care consumer protections and access to affordable health insurance. she was also an adjunct professor in gergetown's graduate public policy school. before she joined that faculty she was deputy assistant secretary for health legislation at the department of health and human services from 1993 to 1997 and was the secretary's legislative liaison on all federal health care issues including then national health care reform medicare, medicaid and u.s. public health agencies and programs. before that she worked as health policy adviser to several members as congress, including as legislative assistant to senator john d. rockefeller of west virginia and congressman sander lev of gn begun. shwas member of advisory board of the california health benefits review program, served

on board of directors from the maryland health insurance plan from 2004 to 2006 an was a member of the institute after medicine committee on cancer survivorship. she's also been on the standards committee of quality assurance and occasionally volunteers for the american chanancer society' reach to recovery program. karen, thank you for being with us this morning. >> thank you, susan. good morning, everyone. i'm just going t sit down if that's all right. i have to say, after, i don't know, a dozen years trying to get into health affairs and occasionally getting published, it's really quite lovely to be here this morning. thank you for inviting me. so i wanted to spend a little time this morning telling you what i'm up to these days at the department. i am back. don't have as nice an office. we are no longer to enact health reform, we're working to implement health reform. there is a new entity at hhs called the office of consumer

information and inrance oversight. so a big part of implementation is developing really brand new capacity at the federal government level,elative to private health insurance. and this office is the one that is to implement all of the provisions that relate to private health insurance. so the new market rules, the exchanges, the new federal high risk pool program called the pre-existing condition insurance program. we're in four divisions. we are recruiting some pretty impressive talent, if i do say so myself. our director, jay angoff, is himself, a former insurance commissioner from state of missouri. two of our division directors, joel ario, who heads up the exchange division, is a former commissioner from states of pennsylvania and oregon. steve larson, who heads up the oversight division, is form eer

maryland commissioner. richard popper, my colleague, heads up the insurance division program which includes the early reree insurance program and new pre-existing condition insurance program. he had been the executive director of the maryland high risk pool. very expert in that area. and we've recruited other folks out of states. insurance departnt offices, attorney general offices, we have folks from the industry. so we're really building up i think some very impressive talent and expertise related to changing, understanding private health insurance and changing the way it works. and implementing all of those rules. i head up the office of consumer support, eni wanted to tell you a little bit about what we do in my division. we have sort of two basic areas. one is to promote transparency in private health insurance coverage, and the other is to provide direct consumer services. the traparency agenda is a big

one. i'm pleased that our agency, the office of consumer information and insurance oversight gives consumer information top bi billing. transparency is the secret to us to implementation to really making it work. the affordable care act ultimately envisions a new kind of health insurance coverage, now kinds of more organized insurance markets and new kind of competition. from private health plans, where they compete on the basis of efficiency and customer service, and not on the basis of cherry picking and risk selection and avoiding costs. and that vision for the future, which isn't too far off, is still not where we are today. so we have a long way to go to get there, and as i said, i think transparency is making more transparency is a key ingredient. anybody who's tried to read your own health insurance policy today knows that these documents

are pretty inscrutable, if you can get your hands on them. when you're applying for health insurance now that you buy on your own you can't get the policy in most states until you've purchased it. you can only get a brochure. you don't get to see the fine print until later after you've si signed othe dolted line. policies are written in jargon, they're notandard. health insurance is not a commodity like rice. you know, when you buy rice, it's rice and you can compare prices, but it may be a little bit different, but it's still rice and you knowhat you're going to get on the dinner table at the endof the day. health insurance isn't like that, and lots of don't even fully understand what it is that they're getting when they buy coverage until they use it, until they get sick or hurt, then that's a heck of a time to be finding out you didn't buy what you thought you were going get. price shopping for health insurance, which is going to be part of market competition, driving efficiency, assumes people will be ab to distinguish between like and

unlike products and compare prices in a meaningful way. you can't do that today. price shopping is a perilous thing to do today. so -- and people get caught offguard. so we need to fix that. by 2014 there will be more market rules. policies will be more standardized. there will be standards for essential benefits that all qualified policies need to cover. they'll be subsidized which will take some of the pain out of paying for the cost of coverage and make it re affordable for everybody regardless of their income. and the marketplaces will be more organized and so, again, all of that requires that we just make more information about policies available to people and that process starts now. so we've got two main initiatives in the division of consumer support that we're working on. one is our new website healthcare.gov.

has anybody seen it? come on, more hands than that. all right. so this was launched on july 1st, as required by the affordable care act. it provides a lot of information about health reform. the key component is the insurance finder. click on the blue button in the left hand corner of the screen that says "find insurance now" and that will show youhe major medical policies for sale in the individual and small group market. no big deal, right? well, that was the first big deal. just cataloging what's for sa in the individual and the small-group market was a challenge. and it was a tremendous amount of work. we -- we asked states to help us, provide us with a list of who was licensed to sell coverage and what they were licensed to sell. many of them could do that, but some of them couldn't do that. because this is pretty impenetrable market even athe

state level where it's regulated. some of them said, well, i can show you licend insurers but not the ones that sell coverage. just sort of a reminder that resources, i think, at every level, at the state level, certainly, have been limited and that there's been a lot of focus on solvency. that that has been the primary focus at the state level. if you have limited resources and keep an eye on everything going on in the insurance rkets you want to make sure the claims are solvent and can play claims. when you look at data, life and health, or accident and health gets lumped together. finding all of these plans and gets them up theting them up th. they don't all register with the neic. we had to figure out a new identification system that included their numbers but also

their taxpayer i.d. numbers and how can we distinguish this plan from this plan from this plan so we have a list? we want to see what's out there. that's been a tremendous amount of work. the -- we launched in july, just showing you a st of plans that were for sale in the individual market for last month in october. we added some information, more detailed information about the benefits that are covered and also estimates of what they cost. of course, we can't tell you exactly what health insurance policy in the individual mrket will cost until u go to apply for it because of medical underwriting and the price will vary based on your healstatus a history. we can provide consumers with information about how often plans turn people down because of their history. we're gradually, gradually adding to this information.

we're going to refresh the october launch in, next monday, the 15th, and we're going to just about double the number of plans that we show. we had - this is a difficult process for the industry, too, as it turns out, to report this information to us. and we're asking them for data and in a specified format that they haven't seen before, and this also happened right as september 23rd was happeningnd plans were kind of changing and ticking over. so we had reportingssues for october, but i think we're going to catch everybody who didn't show up on the october launch monday. so we should see a lot more individual market plans. then we'll turn to the group market. providing information to small employers is another important part of our agenda. that's a big purchaser of health insurance today. and we are working on figuring out a methodology to provide this same information to small employers. it's not quite as easy as it

sounds. first of all, the rating methodologies in the small group market are incredibly complicated. insurers use a wole lot more rating factors now for small employers than they do for individuals. so you know, including the size of the employer, you know, two emplers buying the same policy, if oneonly has five employees and one has 25, they pay different rates based on fact insurers would prefer not to sell to microgroups. industry, whether or not it's a first-time purchase or whether they're replacing other coverage. there are a lot of different factors and insurers use them in digit ways. we need to figure out a reporting template that captures that and figure out a way for small employers to be able to request e same kinds of pricing estimates that individuals can now request. so when you go to healthcare.gov now you have to input your gender and age and whether you smoke and your zip code where you live. imagine you're a small employer with 40 employees. you know everybody's birthday?

do you know theirives birthdays? how are you going to but this stuff in there ? we're trng to figure out a way the small employer can get the same information without having to go through and do ts entire census which is a barrier to the information. we're working on that. we want to have this similar kind of information for small employers up in 22011. we're working really hard on that. some oyou have asked me, phil was talking about this before, there's a lot of interest of the data that is on healthcare.gov. you can rank plans, for example, by enrollment, the most to the least popular plan in a zip code, but you can't see the enrollment numbers. some folks are interested to see that. a lot of folks are interested to see that. you should be interested to see that. i can see that. it's really interesting. so we're also working on a

regulation to create public use files so we can just put these data out there and everybody can see them, analyze them, staudy them, write about them. i think that's important, too. transparcy is all about transparency. everybody should look and apply their own smarts to what it is we have and understanding how the market works. >> just a quick question? >> yes? >> why is that information not available now? >> we have a publish a regulation engo through a whole analysis of the data and make sure it can be released to the public. there's a required analysis before you release data that is reported to the government that we have through. so, we're in the government, we have rules. we're working on it. we're definitely working on it. it's a priority and i really want that out there as quickly as we can. so, and then we'll be addingto this over time. so e law requires, as i mentioned, more standardization

of coverage eventually but leading up to 2014 the law requires that we establish just some standard definitions of insurance terms. dedoub deductible doesn't always mean deductible if you look at a policy and that makes it hard for consumers. we've been working with a working group of stakeholders which has been trafferrific, meg two, three hours a week on these massive conference calls to develop their recommendations on uniform definitions of insurance terms and doesn't mean insurers have to, you know, change their policies right now, they just have to, you know, they have to use -- they have to -- when they use the words where we lay out, day have to me they have to mean what they y. so that consumers can begin to have some sign posts they can rely on. then also developing uniform summary of benefits. again, sounds like no big deal, it's a big deal. so you know, just kind of

playing out some basics about what's covered and what isn't covered and how it's limited and doing that in terminology that consumers can understand. the experts tell us we should write this at a fifth grade reading level. you really can't do that. a fifth grade reading level limits the amount of syllables you can use and these are big words. we're really trying to work through all of this and, again, make this information as meaningful to consumers as possible. the other thing we need to develop is something called coverage facts, which is kind of a dareivation of the nutritional facts label on the cereal box. any kind of food that sort of lays out in a serving of this food, you know, this i your minimum daily requirement of vitamin-c and fiber and here's how much of that this serving will give to you. we need to develop those for insurance polics. we need to lay out benchmark

sort of treatment scenarios. if you were to get pregnant you might need nine prenatal visits and two days in the hospital and sort of lay that out and say how much of that would this policy cover? so that we can give people some just common benchmarks. you know, your pregnancy might not always be the benchmark but you can take that benchmark and compare the plans against it to begin to see little more how all of these many, many dimensioned covers benefits and cost sharing rules work togeer to produce an end result. you know, i need this much care, how much am i going to have to pay out of pocket? so that's one of the things we're doing. on transparency. oh, then one other thing -- that's sort of with the website. then the other thing on deck for 2011 is the development of disclosure regulation. there's a section in the law called 2715-a that gives the secretary broad authority to require disclosure of all kinds

of data from insurance companies. quite apart from what they cover on paper, how it works in practice. how often do you pay claims and how often do you deny them and what are the aren't why? how does your underwriting work? if somebody buys a policy early and makes a claim, what happens with the investigation, when does that result in rescission and when does that result in other kinds of changes? so all of that is on deck too. another big regulation we need to get out. we'll use that to certainly inform oversight, but also to develop other kinds of measures of plan performance for consumers, so again, when they're comparing products, you see two products that look like they're the same and one's a whole lot cheaper, wow, interesting, that one denies your claims way more often than this one. just give people a lot more information about what to expect. so that's kind of the transparency agenda. adding into that is stuff that is being develop in other parts.

steve larcenyson is working on medical loss ratio regnd reg for rate review procedures. people, again, can see more about how insurance works an what they can expect from it. and then our other area in my division is direct consumer rvices. and we he two kind of main components there. one is a new consumer assistance program, state-based consumer assistance program. we announced the grants a couple of weeks agon october. and the affordable care act provides funds to create these ombudsmen in states to help people answer their questions about private health insurance, understand what coverage options they have, help them enroll. when a claim is denied these ombudsmen programs are to help you file your appeal and walk you through the process to do that. they're there to advocate for

consumers and really provide hand holding. because insurance is hard. and it's always going to be hard. even when it's all transparent and simpler and more standardized, it's going to be hard. because by definition when you're using it a lot, you're sick. and you're tired. and you just need sometimes some help, you know, somebody just kind of, here, here's all my paper, can you take care of this claim for me? we just announced our first 40 grantees a couple of weeks ago states, territories, district of columbia. and we've just got the money out. we're providg -- we're in the process now of standing up these programs. a lot of them where a lot of our state grantees were already in the business of consumer assistance in one form or another. we have a number of state insurance departments where their consumer services offices have applied and there are grantees but also state attorney generals offices, health departments, an interesting mix of state agencies. and about, what, 16, 17 of them

are partners with non-profit consumer organizations to kind of move this really out into communities so you don't have to go to some big government office building to find it. we're very excited about that. and again, looping back to transparency, one of the statutory requirements of these grantees is they collect data. so, you know, who's coming in, what kindsof problems are they incurring? how hard are ey to fix? you know, when you file an apal, how often to you win and how often not? and they're supposed to report this information back to us. in aggregate form to strengthen oversight. so that's important. when insurance doesn't work it's, you know, it's going to be most important to see, well, when it doesn't work for the people making the biggest claims who are the sickest and that can be a really hard thing to fair it out in broad data reporting.

this is an indication of how insurance is working on the ground and hopefully a way to leverage. if one problem comes in and data on that gets reportedack you can get to the root level of the problem and not solve it every time people keep showing up with the same problem time and again. so we're working on this consumer assistance program. very excited about this. then t last area we're working on in my office is appeal s. there are new apal rights under the affordable care act. internal appeals to your plans. when a claim is denied. how quickly they need to proces that and how that needs to work. then a right to external appeal. which many states have had external appeal laws. you've probably read some of my reports about them if you followed my work at george foun. now all states will have external appeal laws that meet a minimum threshold for consumer

protections and when they don't the secretary is required to establish a federal system that will be a place where people can take their disputes with their health plans to an objective third party and get them resolved. we put that reg out in july, and it took effect in september. we, understanding that most state legislatures were out by then, we gave them until next july to conform their existing laws where they had them, you know, to make the changes they need to bring them up to the federal standards. we sort of left the kpiexisting laws be for a little bit. the federal system kicks in immediately for states that didn't, states and territories that didn't have laws. we had a quick put together. not a problem. we kind of called up our budties at opm and said can we temporarily rent space on your appeals program you use for federal employees and make it available in these states that don't have a system while we go

through the procurement? which is a little detailed. we'll have our permanent process in place next summer when the states a ready to go and meanwhile we've got this. a little duct tape and prayer and we're getting stuff done as quickly as we can. and, ain, we think the provision of direct consumer services is also fundamentally important. pele just need help a the appeals i thk is a critical one. at the end of the day when you paid your money for insurance you want to make sure it actually covers the carethat is supposed to be covered and so that's what we're doing. so i don't know, i guess i'll pause there and -- >> great. thanks, karen. let me start by asking you, you probably knew more about private health insurance than almost anybody on the planet. because of your work at gegetown. you also had direct personal experience as a patient navigating complexities of policies. what's been the biggest surprise

to you coming into this office, having access to data that apparently has never been aggregated before in the united states? you suested earlier that the enrollment numbers were going to prove interesting once people saw them. so i gather there's some very interesting patterns now in terms of market share. from state to state. what else has really been the big eye opener for you in. >> actually, i'm not sure we've really gone the depths yet. we're still getting basic information. our data shows markets are highly concentrated. we kind of now that before. now i can see how concentrated they are. it will help as we sort of move forward and there are questions about, is this change going to destabilize or that cnge? we can look some of this up now and see, wow, that's destabilizing your market share, you only cover 150 people. so you know, that i think, just getting it i think has been the interestingart for me.

the denial data, there's been a lot of interest in the denial and uprate data. one of the things i guess that's been fun for me is how difficult it is to capture this, that we really do need to think carefully about creating measures. we thought we created kind of a careful measure. some of the carriers have come back and said, well, i know, i went through your training but that's not how i reported it so wehink we probably still have bugs in that. i know there's a lot of interest in, can i please see the underlying date a? we'd like to clean that up. the industry has been good at reporting this information and reporting back to us, well, this is how we did it, we want to make sure we're doing this correctly. so i guess maybe the biggest surprise has been how much thought you have to put into how you define these date to elements and how you makeure that they're getting reported consistently. it's -- and some of this i think will be easier in 2014, but it's

very, very difficult to create a standardized anything for the current insurance market. it is just -- it defies standardizing. so there are going to be a lot of exceptions. one of the things, actually, that we've encountered with a couple of carriers when we started getting the icing data, i didn't realize this, but there are some carriers that don't really sell policies. they sell pieces of policies. and you can really just completely mix and match it. it's almost like, you know, how many parts of the jigsaw puzzle would you like to buy? and then the price of what you buy depends on what pieces you bought. when they said, how do we report these prices? i said, gee, i don't know. so we basically just said we had a threshold, you know, when you have to report to us all the policies that represent at least 1% of your market share in a zip code, we said, look at your books and figure out what are your combinations you sell and

report us the prices for all those combinations. so there are some kind of interesting practices out there that aren't necessarily good for consumers. >> well, just to follow-up, i was intrigued when you said sometimes the deductible isn't always a deductible. what else could it be? >> well, you know, you tend to think, i tend to think, you know, i have a policy with a $1,000 deductible and it pays 80/20, right? that's sort of the basic framework, but not so much. some policies have deductibles specific to different service that are covered. we saw one -- out of pocket limit is another one. pay 80/20 up to some limit and the plan kicks into 100%. that's not always how it goes. some policy, certain things don't count against the deductible or certain things don't start tolling against the out of pocket limit until you have reached some other limit somewhere else in the policy.

there's some kind of quirky features that don't show up on a basic summary right now. we need to, until some of those go away we e need to at least put orange traffic hazard cones around them. when you to go to healthcare..gov when you see the icon that warns people, it's an orange traffic cone. we got tired one night and came up with that. you do need to kind of warn people, slippery when wet, and be careful. >> now we can all feel better that we're not bizarre just because we have no idea what our insurance policies say when we get the elanations of benefits. so let's open it up to questions for karen. if you would introduce yourself by name and affiliation. that would be great. >> bob. i wonder if the site now has a or will have the capability to select among different types of insurance. here's a hypoetical. someone just gets laid off from work andhe spouse finds out

that he or she, the nonworking spouse, has diabetes or cancer. how would you know, should i go on cobra -- should i takcobra, should i go to the individual market or should i go right to high-risk pool in my state? how would one navigate? answer those questions. >> well, actually, in the finder we try to walk you through all of those option so the finder doesn't just show you the private insurance policies. it asks you a couple of questions, including, there's a question about, i've recently lost coverage that i had through work. then it kicks up a screen of options for you that are somewhat tailored. if someone has lost their job and coverage, it tells you about cobra and you can nd out more about that and how it works and how it costs and, you know, the fact it will ta you and it will be the same benefits and there won't be a new preex.

it will have asked you by the time youot to that point, you know, if you have a spouse who works, because you may -- if that spouse's employer offers coverage and you weren't signed up in that plan because the whole family was signed up in your plan, you have by law special enrollment opportunity to just go into your spouse's plan. you don't have to wait until the next open season. you can just go in. that's been the rule since hipaa was enacted. if you have a health condition, you might not get into this. and if there's a gh-risk pool in your state it will tell you about that and tell you about the new pre-existing condition insurance program. but th will be hard to get into if you lost your job because that requires that you have to be uninsured for six months. maybe you can get into your state high-risk pool. it will talk about chip and eligibility levels for that, maybe you could get your kids in there, and it will walk through all of these different options for you in as understandable a way as we figured out how to do

it. it is somewhat tailored. marilyn? >> marilyn. i'm sorry to ask this. i think this is going to sound like a dumb question. >> there are no dumb questions. >> the work you're doing now, the comparative information, the website, transparency, this -- i can see what this does to help until 2014. how is this -- can this information then be used post-2014 once we have the exchanges in place? i mean, first of all, what will happen to your organization and your mission and what happens with this platform that you're building? >> this all continues. this is really building what we'll need in 2014. i mean, it certainly is also helpful for people now. that they can at least see a little bit about the differences in the marketplace. it's not likee're going to one size fits all in 2014.

there are going to be plan options that people have. they'll still vary. the coverage facts analysis w did was based on work we did at georgetown. we applied that analysis to massachusetts plans that are sold through the connector and found some kind of interesting differences, you know? like three different bronze plans leave you with pretty variable out of pocket results, just based on some features in the plans that turns out weren't very well standardized. >> do you envision,then, this kind of comparative information will be available, that you'll make it available to the various state exchanges? >> yes. yes. this is national data collection. yes. we'll just keep collecting this. the exchanges can use it. i don't think we need to collect at 50 different times. exchanges may collect additional information. you knows, we're going to be this kind of federalist system, but, no, this is national reporting authority. it's ongoing. it doesn't stop in 2014. it keeps going. we're going to have sortf, at least one layer of basic

information you'll always have about plans. it's not just for insurance policies sold through the exchanges. these apply to group pla as well. if you're getting coverage through work or thinking about leaving or coming, you can compare what view to where you might go. i think that's fundamentally important. >> jt a quick question. is all of this, then, potentially fodder for a national exchange? assuming that there may be states that decide not to set up exchanges? >> this is useful, i think this is just plain useful. it doesn't really matter the way the markets are organized and who's in and who's out. this is consistent information that should be available to everybody. >> let's take your question right here. >> thanks. deborah, u.s. news and world report. >> hi, deborah. >> hi.

i was curious, you brought up massachuset massachusetts. i'm curious how you were using massachusetts and california as models to develop andardization of terms. i'm thinking, haven't these states done the legwork for you? are you finding there may be some things in these states, statewide insurance plans that haveshortcomings you need to deal with now? >> our working group includes a number of state regulators. 've had really remarkable input from consumer and patient ganizations, state regulators, there have been a number of insurance compans that participate in the working group including actually a carrier in massachusetts. so, and you know, this is pretty basic. this is hard. may i just complain a little bit? this is hard. so there's a reason why we're starting this now. i think the congress was wise to get this started now and not wait until, you know, let's throw this together in 2014. this is going to evolve. it will get a whole lot more

intense once we start developing the essential benefits. so you think deductible doesn't mean deductible, guess what,dme doesn't always mean dme. we'll have to delve into this a whole lot more as we get into the definitionf benefits. but i don't know, we're doing it. >> let's take a qution in the back. looks like julie robert. >> hi, jules. >> julie robert from npr. we've heard this week about the republican governors and republican state legislate thurs who are not enamored of this law. can you talk about the role the states will play in sort of your, you know, we know about the exchanges. what role do the states play in some of these consumer efforts and what do you anticipate may happen if we have 30 states that don't want to play in this particular sand box? what would you have to? >> the consumer assistance program is one that doesn't have a federal fallback.

we have 40 fwrgrantees, we don' have 50. there's republican governors, democratic governors. i like to think on the consumer assistance stuff, that everybody kind of understands that you can use a hand up when you ge sick and have problems with your snus health insurance. so, i mean, so far that s not been an issue. and i mean, it just hasn't been an issue. >> have the states been so far participating? >> i mean, pretty much. you know, minnesota kind of didn't participate in anything, and i mean -- >> minnesota did not? >> no. >> pawlenty said he wasn't going to participate. >> no. we had some of that. mostly they've been stepping up. i think -- the granting of federal resources to states has really been powerful. states are really broke, a lot of them. they just don't have a lot of money. and you know, if you're offering $1 million here, $1 million

here, pretty soon they're like, yeah, i could really use that. so i think, you know, i think for the most part the states have been a pretty good partner. and we've tried to be a pretty good partner back. on the transparency and data collection, we're working with insurance commissioners, bipartisan insurance commissioners, too. it's just not really a partan issue. you know, their big thing to us is, it's important that we just collect this once. we don't need to do all this collection and build a big data system to keep it in. we said, no, no, we'll take care of that. so i think, you know, it's -- there's been some good senergy with the federal government coming in with resources and standards and then states stepping up. you know, it's not perfect, but it's pretty good. >> you've got -- you said at least ten states that did not apply for fuing? or that you did not -- >> ten didn't. some of them, it wasn't always a partisan thing. i was on t phone with some of them -- you know, we've also

just been doing this lickety split. really. i'm tired. we've just been shoving through a lot of this stuff. applying for federal grants isn't the easiest thing in the wod. so some states i think are still on a little bit of a learning curve on that. in a couple of states, we had sort of funky fiscal year timing issues. so you know, mostly there was just tremendous interest and they wanted to play and so now we're going forward. >> question right here? make sure i'm t missing anybody. okay. >> hi, karen. drew armstrong with bloomberg news. it sounds like a lot of the changes you all are putting in place are going to alter the way insurers compete with each other on the individual market. explain what your vision isfor how you see insurers competing now and on what way basis more so and in comparison to how you think they did compete based on the data you're collecting now and practices you're able to see. >> well, i think competing on

the basis of consumer service is really important issue, and i worry. i haven't seen these data. so i don't want to be too cynical and, you know, dark in my vision. i worry that there's an incentive now for insurers to just kind of pick on the consumers who generate the biggest claims because ifyou can make them kind of want to go elsewhere, then that's a good thing. and you can keep your premiums low for your healthy consurs by getting rid of the sick ones. the point of consumers is for healthy consumers to come in so you can pay the claims of the sick ones. i think focusing on how the security of coverage is for people, particularly when they're sick, is going to be, i mean, that's just going to be a new dimension that you can't really see now in health insurance. and i think that will also help consumers. i think the whol concept of insurance is really complicated. you know, you're buying

protection. i can't tell you how many people, people in my own family who have said, oh, man, i paid so much for insurance and i didn't even make a claim this year. like, no, it's good if you didn't make a claim this year. it means you didn't get hit by a car,t todidn't find a lump, it' good thing. you ve the protection in case you do. that's a really compcated concept. so i think, you know, focusing measures of how insurance works for people when they're sick reminds them this is what -- you're not buying this in case you stay healthy. you know, this is really a scary occurrence that you're buying protection from. so i hope it will kind of make us all a little bit smarter about what wexpect from insurance and make insurers more accountable to deliver that. >> good morning, karen, it's matt dobias at "national journal." i have to ask the qustion, as you move forward, does the thought ever creep in the back of your head that all this might

be for naught? you know, we've seen the results from the midterm election projecting forward to 2012, we can do the math in the back of our head. if there is a successful to repeal and replace, what then? >> well, i'm just not going to worry about that today. you know, the president is committed to moving forward, and i sure have a lot of work to do, so i'm just kind of staying focused on doing this. i think it will help. i think it will keep us focused on what this is all about and i think the president's committed to keeping it moving forward and be a hell of a vote to overwrite a veto. so -- >> has there been talk amongst all the people in the office? is it a conversation topic? >> nah, i mean, you know, we're -- the partisans weren't happy about the election, but no, we are seriously busy. we are keeping our nose on the intone. we are getting our work done. we have a lot of work to do, and

you know, a short time to get it done. so we're -- it's actually not that hard to stay focused on what's right in front of us. it's pretty much blotting out the rest of our field of vision. so -- >> let me ask you quickly, karen, national association of insurance commissioners is developing model legislation for lots of other provisions that effect state insurance that have to now be -- come into synch withhe federal law. are there particular areas here that are going to lend themselves to a model, a piece of legislation that niac might develop? or how are states going to make their laws come into alignment with respect to these consumer protection issues? >> well, this is something the naic has long done for states and inact, theinimum sort of standard for external appeals is the most recently adopted, now a couple o years ago, naic act on external appeals. the tradition has been the naic

puts a model act and goes to state legislatures and don't adopt it word for word, they make changes. i think that will continue, but it's an important service and state legislatures are strapped for time, too. they meet in sort sessions. they don't have profession thal staff. it's very helpful when the naic can give them a draft. >> will there be a mega model? >> i'm trying to think, i actually don't know if they're working on models for all -- for example, the coverage of preventative services or some of the early, the coverage of up to 26. i don't know the answer to that question. certainly as we move forward into theroader market reforms and guarantee issue and community rating i would expect we would see naic pony up models to give states a shortcut. >> a question all the way in the back then we'll come back over

here. >> hi, janet adamy from the "wall street journal." i want to ask two questions. one, there are powers in the law that give the exchange, the ability to keep out insurers that have unfairly raised premi premiums. obviously we've seen premium increases this fall where insurers were attributing it to the law. the administration disagreed with some of those increases. do you have indication so far there will be insurers kept out of the exchanges for premium ine seen and my second question, if i may ask a second question to follow up on what susan said point national exchange, how many states -- the pssibility of a national exchange, how many states so far have indicated that they may not run their own exchange and if so would you then do a national he can change for them or would these be individual state base exchanges? >> you know, it's -- "a," i'll refer to you my colleague joel

and it's early toknow the answ to y of those questions. joel's division is now just beginning to put out the first planning grants to states including innovator grants where states can really kindf try to dig in on some of the i.t. issues that will be importt to creating a functioning exchange. on the rate increase, someone at kaiser just forwarded to me the -- connecticut was a state that recently there was a flap and i know some insurers have been saying, oh, these big rate increases are due to, you know, the affordable care act and all these new big mandates and when you actually look at the file's rates -- i think it was rantham in ken conduct -- i shouldn't say, but they were required to break it down in the state and in a 20% rate increase, 0.2 was

due to that i think we'll have a lot of arguing about rate increases but the ole point of rate review so we can go in and check the actual numbers and see. in terms of how states, you know, how exclusive or states will be, i think that's still being worked out and there are a lot of different modelsfor exchanges, one where sort of everybody can come in and compete as long as you're licensed and one more like massachusetts where, you know, the exchange acces bids and, you know, just sort of tries to take the best of the best to offer within the exchange and doesn't allow all the insurers to participate and we're just going to have to see how it is that states build that out and there is provision for the federal government to operate an exchange when the states don't so we'll have to figure out how to do that too but i don't think we've decided that yet. >> let's take these questions over here. these two. >> hi, sara cliff with politico, two questions about heal healthcaregov. do you know how many plans will

be listed on the site as of this coming monday? >> it's more than 8,000. >> using or creating data files that would be accessible to folks, some have raised concerns saying that's not what we submitted this for. that's kind of outside of what we were told this was being used for. was hoping you could respond to their concerns about this data they've been submitting for healthcare.gov. >> well, that's why we need to do a regulation. we'll do i and they'll comment and then i'll comment back, but we -- i mean we indicated in the reg that established the portal that we wanted to make the data public and that is our intent. >> question here? >> phil gallovits with iser health news. i guess we're all for

transparency but how much do you think people look at this? when push comes to shove when they survey employers, they're buying on provides and that's all the big employers doing it so if we put out this data for individuals which may sound gait, what's the chance they'll use it? when you look at the precept plans there's been so little pickup of it, what does that tell us about what's going to happen in 2014? >> well, so let me separate those. so picip is still new and launched it on july 1st but a lot of states didn't tart enrolling them into late august or september. and the pice varies and inome states we had -- where the federal government is operating it, we had to make estimates on what the standard rates were because we didn't really know annow that we've be able to look at the healthcare.gov data you'll see a reduction in

premiums, a significant reduction in premiums along the order of i think 20% so -- oh, i'm sorry, the pre-existing condition -- >> repeat what you said -- 20% reduction. >> in the premium in the states where the federal government is operating this so i think effective january so it is growing. it's growing faster in other states. i don't know all the -- i'll refer you to richard pauper, my colleague, but we do expect, yo know, that the curve is going to continue upwards and see enrollment grow >> that's the high risk -- >> yes. >> what's the consumer -- what's the likelihood they'll use it. >> that's part of the trick of healthcare.gov so we're constantly modifying it and having a big meeting looking at

all the navigational things and i mean there's a ton of information up there and how can you sort of guide people rough it, but i think like i said, now when the world is so unstandardized, it's always going to be a super, super challenge. i think the consumer assistance that, you know, one-on-one assistance will also help with that and as we measure some of these things and can get a better idea of what's happening out there, what some of this variation really is all about, and then we set health plan standards and market standards for 2014 we can make some of it go away and that will help too but i think, you know, it's like i said it's always going to be hard, and so that's why i work so hard. and the states too. i mean they're really engaged in this. >> chris a then we'll come back over here. >> hi, chris fleming from health affairs, a health affairs blog. as you have talked about your work in trying to allow consumers to make more effective

choices, opponents of health reform have argued that we shouldn't put any limits on choices. we shouldn't try to put a one size fit all model in. we should allow individualized choice. w as an overl matter how important to allowing consumers to make effective choices is it to standardize the options out there so that people are comparing like versus like as opposed to just creating as much transparency as possible so that whatever choices consumers make they're making an informed choice? >> well, i mean, i think we'll be following the guidelines of the affordable care act on that which has some of both. there is some standardization that is contemplated, required under the affordable care act certainly for policies in the exchange on the bronze, god, silver stuff but the transparency applies everywhere, in and out, in employer plans, and i do expect it'll continue to be a challenge for people,

but i think it's going to be a whole lot better than where we are today so -- >> so you think that -- i mean is there such a thing as too much choice if there are too many options out there are consumers making less of an effective -- >> no, i think we have seen certainly in medicare.gov tha when you give people0 choices they shut down. nobody's brain is a computer and can model it and process it. i don't know that people need 50 choices but people do want choices, and they'd like some assurances that hidden among whatever the choices are, there aren't these littl you know, grenades that are going to go off on th so some of this is to just comb away some of the bad choices or some of the options that c make a choice, you know, not very secure, and just guarantee people that within this, you know, basket of things you have to choose from, you're always going to get at let, you know, this much protection, so that's what we're trying todo. >> yes, over here.

you mentioned some ofhe data you'rele examining market disruptions. i'm wondering to what extent that's playing into the waiver process and regulation for the medical loss ratio. there's broad authority on avoiding market disruptions there. so how is that factoring in and what are you seeing in terms of potential for market disruptions as it goes forward and i'llask, when will we see that regulation? >> let me do the second one then -- soon. very -- i think we'll try to get that out by the end of this month, so i would send all your other questions to my colleague steve larson. >> and do you want to take the first part of that. >> i forget what that was. >> the data you're collecting in terms of disruptions to markets at the state level and plan level, how does that factor into development of the -- a regulation or concerns over that? >> i mean steve was the first

one to ask me for this. when he was running around when shortly after we got there before we even launched in july, you know, he said, wow, you know, all these chars about market disruption, where am i going to get some market share data? i said, ooh, ooh, i have it. he said, really? so i think this will be very helpful and it's helpful at the state level too. i've just hired a new director for my web portal team who came from a state insurance department and it's amazing what a little information will do for a regulator. it really goes a longway so -- it's a lot of states are excited too and i got to go t a meeting. >> so, karen, just to wrap up, it's open enrollment season for many americans right now. it's also the time of year as we approach the end of the year where people look at insurance policies for ne year, so you've got 15 seconds to give americans their best advice from you about how to approach shopping for insurance this

year. >> well, it's especially importanthis year to look at your insurance options, particularly your employer is offering new options, because as plans renew, following september 23rd, that's when they pick up a lot of these new protections that just took effect under the affordable care act so it's as your plan renews you'll have the right to cover your kid up to the age of 26 and they won't be preexiting your younger children and plans have to cover preventive selves without cost sharing and these are important so i would really take a good look at your insurance options now. if you don't see any of these new protections you're probably in a grandfathered plan, but -- so they're not required to offer you these new protections, but they are required to tell you that they're grandfathered and if there are a lot of changes in the plan they will lose the

grandfather status so if they raise your deductible or the employer kicks in a whole lot less toward the premium then it can change, soow is a really good time to start studying up on your insurance options and see what's available and like i said before, d't just look at the price. obviously that is critically important for everybody, but remember you're buying health insurance, not in case you stay healthy but in case you stay sick and look for the most protection you can possibly afford and you'll thank yourself late sfler great. karen, thank you very much for being with us. >> thank you very much. appreciate it.

[unintelligible] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> next a speech by richard fisher, the president and ceo of the bank in dallas. and then a q&a session with bethany mclean. after that, "washington journal." and the communicators is tonight at 8:00 eastern on c-span2. >> we provide coverage of politics and affairs. it is available to you on television, on-line in social

media sites. we take c-span on the road. we bring our resources to your community. washington your way, the c-span network. it is created by cable and provided as a public service. >> nothing ceo and president of the federal reserve bank of dallas. earlier this week, he criticized the decision of an bernanke to make some treasury bonds that were purchased available to financial institutions. he says this may be the wrong sense of the u.s. economy. this is a 50 minute event in san antonio. [unintelligible]

>> good afternoon. i want to welcome you to this institute. we have a great program over the next few hours. before richard begins, i want to dial back to 2002 when i joined the board. i decided to do this, because i felt the we needed to take a career step forward in terms of providing a value to treasurers

and the senior people in the room here today. that is something but we were not actively doing back then in 2002. we are having our sixth event today. in june, we have ever first effort form in the london. it was a fact of this event. next year, it will be in paris. i have already booked my plane ticket. many canadian treasurers are here today. we have expanded across the border. it has been a great ride. we will continue to increase the depth and breadth of the program to provide more value to the

people in a room here today. a lot of hard work has been done by credit martin. -- craig martin. if you enjoy it, thank him. if you do not, i will give you his room number at the hotel. [laughter] [applause] without further ado, i like to introduce richard fisher. chief executive officer of the federal bank reserves of dallas. we are very fortunate to have him with us here today to share some timely remarks. ladies and gentlemen, richard fisher. [applause]

>> i am glad to hear you will be having your next forum in paris, texas. [laughter] i hear that condoleezza rice spoke to you. and i apologize that the only instrument i can play is the radio. congressman dan daleth -- gonzales is holding a congressional hearing somewhere in the hereafter.

he called upon members to account for themselves after the fed's recent actions. i can only account for and speak for my own actions, not that of anyone else on the federal reserve board. what i plan to do today is provide you with an analysis on the economic predicament. i presented it to the market last week. of a flight to summarize the argument regarding monetary policy. i want to provide a personal perspective on the decision made by the committee as a whole. afterwards, i will do my best to avoid any questions you may have. [laughter]

>> the chairman called upon all participants to present others their individual sense of the economy. i conducted a survey of many ceo's and cfo's from large and small companies across the country. i also knew some financial operators from years ago. the key to crafting monetary policy is placing the thain reta: analysis -- theoretical analysis with a qualitative context of economic behavior

practiced by businesses in consumers and those operating in the field, like you. my report is that more things are moving in the right direction in the wrong direction. green shoots are emerging. general economic conditions are improving slightly. the risk of a double dip in the economy has lessened along with inflation. financial speculation is beginning to raise its head. data from manufacturers, it indicates that activity picked up on a year-to-year basis in october. this might be expected.

there is a range of commodities. this is nothing he would have known from reading the day the press. one of my ceo context just came back from visiting his chinese suppliers. they were encouraging manufacturers to grant wage increases. the manufacturers that supply this particular company with everything from wicker to clothing have started their bid for the fall 2011 needs for

this order that is 30% higher than current levels. alternative production sites are only slightly underbid thing they're chinese counterparts. i made my living with negotiating trade agreements around the world. i know it can be alarming. in the immediate future, a squeeze on margins. other ceo's reported the same phenomenon. then feel they have the pricing herewithall.

[unintelligible] it is unlikely that it will drive down to deflation. there are many items to make of the pce's. this rate tells a slightly different story. it gets a lot of attention from many analysts. there was an annualized rate of 1.3% in august. the number is above the rates the stock earlier in 2010. in 12 months, a 0.1% percentage

point of 1% in clocking at 1% for the last three months. there is a better underlying trend in pce inflations. the core rate should be moving down to the lower steady rate. we are not drifting into deflation. this is consistent with the price picture i have drawn with my colleagues in the past pas. it is holding steady.

to take advantage of cheap money and to refinance their balance sheets and pay dividends. the larger ones are increasing in size. few are using cheap money to refinance the remaining obligations in one of unstable -- unsustainable factors. most of the businesses i talk to our expanding. [unintelligible]

they believe their potential for return in investment is elsewhere. some that have global options of cuttino hiring until it is clear on taxes and regulatory fronts. we do not know if this will change in -- with the new congress. non-financial and financial companies want liquidity. several of my colleagues reported that they were literally begging to have them borrow money over a 10-year times printed smaller companies are not complaining about the

lack of assets. only 60% responded to that they were receiving credit for a long-term expenditures. only 18% responded that they were having difficulties retaining its. only 44% of those companies said they were receiving short-term benefits. of the 54%, falling 12% had substantial difficulties getting credit. the survey was specific to my district. it has the highest correlation of the surveys pmi.

our survey may have some credence. liquidity is omnipresent. that is a concern. it is not being used to hire american workers. and it there are flows of strong in every single category. commodities is one area. the margin account balances exceeds the level of 1987 in 2001.

[unintelligible] buyout people do not typically acquired companies to expand the work force. they require tighter operations instead. there is usually a shorter time frame than normal corp.. we're not given to thinking as strategic acquisitions to affect payrolls. the greens are playing very fast. there must be approached with a

certain caution. we have to be careful with how we calibrate our next strokes. some may want to drive rates to low levels. one effect of lowering engineering rates could create demand for exports. the ultimate objective is to generate employment for american workers. i agree that there could be a liquidity trap. we are the have an interest rates. despite the theoretical promise, there has not been much

done so far. businesses see an opportunity to tap a credit market -- other risk factors. businesses like confidence -- a lack confidence. . consumers will borrow when they believed it makes sense to shift consumption. consumers are restrained by a lack of confidence has seen over the past few years. on the supply side, there are

liquidity factors that come into play. loans is a percentage of assets, and it is declining. i can understand the impulse. quantitative easing will increase to lower rates marginally in add liquidity to markets law affecting the dollar. will this work to the benefit of job creation? that is the question. i said i was skeptical about

looking of the benefits of further asset purchases. they are looking at targeting the government debt yields. there is concern about that modernization. quantitative easing is occurring in certain areas. if this were to change, i may add -- advocate for monetary accommodation. that is not happening yet. i worry about providing monetary

accommodation. i worry about the risk of being perceived as qualitative easing and bahrain copious amounts. that should not be the new normal for implementing monetary policy. everything we know from monetary history says during a time of crisis, we should open the floodgates. this occurred in the past. we did this in 2008 at the federal reserve. it worked. it is not a time of panic or crisis.

the markets may expect more. there are normal operating procedures. and it may take root in the minds of financial operators. i would add that this is thanks to ben bernanke is a leadership regarding liquidity measures implemented in 2008 and 2009. because of what we did, but

neither the money growth nor inflation has fallen off of a cliff. it is growing and not shrinking. there were concerns about a weaker dollar in exchange markets. basic commodities like cotton and soybeans are being produced with incredible efficiency. this is used to close and support lower income earners. when faced with a further squeeze, walmart and dollar general -- those are places for people by their necessities.

but they tend to employ fewer workers. drawing on my experience as a former deputy, it may undermine some protections for a while. we are seeing a beginning of certain of activities in stocks and buyouts in commodity markets. the rich can get a richer. i have no problems with market operators making money. [unintelligible] [laughter] i take no comfort in see

considerable risk in conducting a monetary policy of transferring income from the poor to the rich. senior citizens and others that play by the royals are earning nothing on their savings. too big to fail banks benefited. the presidential administration will tolerate or advocate that dynamic for very long. this could threaten our independence at the federal reserve. the more we engage in a policy of asset purchases, the greater the likelihood of realizing a loss. this could protect us against

capital lawsuits. if unreasonable some areas prevail, the chairman and other members report that there were losses generated. we may be prescribing the wrong medicine. liquidity is abundant money and does not necessarily give us the strength that we want to see. there are disincentives of regulatory policy. those that have the power to create jobs, should be able to do so.

the central bank of the united states should not hold the power s should some of these others. we hope that we will have job creation and further action. they may celebrate the transfer of wealth. this is what i argue death of last meeting. -- argued at the last meeting.

one person listened very carefully. it was a thoughtful and fair hearing at the table. after deliberations, they concluded there were certain circumstances. on top of the amount much of this exercise is transparent. it is an amounts that represents the projected deficit. for the next eight months, the central banks will be monetizing the debt. it is risky business. the history has economic carcasses of those that inc. this as a central bank factor.

how can a decision like this be justified? we have a public answer. in the editorial, m bernanke made a summary station. to ease financial conditions in the past, it will promote economic growth. it will allow homeowners to refinance. there will lower corporate bond rates. and it should boost consumer confidence and spending. we have made all necessary preparations. we are confident that we have the tools to unwind these policies at the appropriate time. that is what he said. he made one reference to some

ordinary inflation. i am a member of the federal open market committee. i respect the will of the committee and affair -- deferred to the chairman. i would suggest that even if he share mine perspective on this matter, you may want to look into this initiative. from my perspective, there are a few ways that the central bank can't approach them. -- can approach them. fiscal abstinence by a new government. or work with the new president's to restore fiscal sobriety in the united states.

with president obama, we are at the end of our line and time is of the essence. the fed is doing its level best to deliver by the mandate given by the congress of the united states. the fed has taken a leap of faith with our political leaders. we incentivize businesses to put to work that money that was invested to create workers -- work for americans. we need congress to move quickly.

we need action this day, otherwise the effective qualitative easing will result in more financial speculation and financial instruments. [unintelligible] [applause] i am happy to take any questions

anyone might have. please state your name. fire away. that is always an inhibiting introduction. [laughter] no questions. let me ask myself a question. just kidding. [laughter] can you hold this who me? >> my name is jeff johnson. the fed has taken a risk, what a risk to you want congress and the president to take? >> it is pretty clear.

they need to organize themselves so we have a tax and regulatory regime that incentivizes corporations, whether they are public or private to express confidence in the future. they must hire more american workers. that takes guts. we have unfunded liabilities. in the enormous amount of work has been spent on this. we have over 90 trillion at the dallas fed. those are big numbers. we have treated them in a way that incentivizes people who

hire workers to put to work. you do not bring down unemployment by discouraging people from hiring new workers. fiscal debauchery is what i have described. sobering up and doing the right thing takes guts. one of my favorite anecdotes, i will tell you. in addition to paul volcker, is a man named george schulz. i to nothing anybody in history as held as many cabinet jobs as he has. he was concerned that an administration would have to

spend more money. the numbers were minuscule compared to now. he called and said, just between you and me, who enjoys spending more? is it worse on republicans or democrats? he came back and said, there is no difference between republicans and democrats in congress, with one exception. [unintelligible] [laughter] i do not think you can. one finger at one or the other. -- point one finger at one party or the other. i think we have extended

ourselves significantly and are well aware of it. we have to take the funds and put them to work. we live in a global less debarment. you are business people. you will advise your people to get the best return on investment. we can do that anywhere in the world. we can be competitive on that front. our desire is to create more employment. that is what they have to do.

>> in your opinion, did the financial regulatory reform adjusted bailout? >> the recent bill passed by congress? time will tell. i am a firm believer that too big to fail means you are too big. some are larger than they were before the crisis. if you get to be a certain size and scope, you have to know your customer. i think some mistakes are made in this area. i am in favor of breaking those

institutions up. it is not fair for them to be subsidized by the rates being paid on deposited money presently. when nisei break things up, it can send a shiver of people's spines. the work being done is to figure out how to conduct themselves saidding to capitol will -- rules that could restrain risk-taking behavior. too much risk-taking behavior should not be underwritten. the answer is, it will take time to figure out when this will be done. we have to under 54 will winds

at the fed that we put together. the law was enacted in a way where we want this done this day. time will tell. it is a very necessary issue to deal with. the intention is to treat it. another question is over there. >> how does the exit plan work? how do you unwind that >ccessfully deat ?

>> there are many ways to do it. bear with me for a moment. we basically spend overtime dealing with the funds rate. we would meet in decide if we want a tight monetary policy. or we would keep its the same or loosen it up. if you loosen it up, you know what defense fund rate. -- you lower the fed funds rate. it is similar to a sprinkler system where we assume that it works, but it does not. institutions missed it and sprung up. the objective was to have it just right so that our garden

grow. if we put too much water on it, we kill it. now we have a much more complex portfolio. we have mortgage-backed securities and treasurys. when you buy them, you pay for things and put them in the market. you can restructure the portfolio. we have payments made on excess reserves. we can move that freighter ground to affect excess reserves. 25 basis points. we have perfected our ability to conduct ourselves and we have

time for those. there are many tools in the tool kit that can be used. the lead times are not clear. there is a simple titrate in methodology we use. we have a lot to learn about the tools that we have. we will use them if we feel inflation is rearing its ugly head. there is the answer to your question. this guy deserves some applause.

[laughter] [applause] my new accomplice in monetary policy. [laughter] >> lawrence crenshaw. many people love with the cyclical factors that drive and employment. certain jobs may never come back to the u.s. what do you think about the strategic efforts and what can be done more? >> i am not a legislature member for have influence on congress. there are those that can water the garden and make sure we get it right. it is very clear to me that as a

global investor and just watching what is going on with our economy that other nations are making enormous progress. this is good news. we won the cold war. we did not have comparted -- competitors of partners in trade. when you have billions of people, you want to improve your living standards. we see that in china. what i like to quote from winston churchill is refined process these.

he was a free trader -- processes. he was a free trader. we have been similar to that doing it successfully for some time. we must continue to improve the standing of our people and prosperity. it comes down to education. that is where we are threatened significantly. that is one of the most important issues. we have to make sure be are preparing our work force. in certain areas, you get paid more.

i think that is the key with long-term issues. we are a nation of immigrants. my parents were immigrants. i do not see a single native american in this audience. we children of immigrants. one thing that happens when i speak it universities is looking at the audience and the change in complexion. you really have to work to pronounced the names of economic ph.d.'s.

[unintelligible] we tapped into university endowments or go out and issue bonds or state money that is taxable. we bring over the best minds and then we do not let them stay. it does not make any sense. we need to focus on education. i think those are a couple of things we have to get fried. one last question -- we have to get right. one last question. i was h