companies because they could not jump through the latest hoop from kathleen sebelius. that is maybe a few thousand pages in the law. it is incumbent upon us to understand what is in the other 27,000 pages. we need to be informed about what this means for our economy, our health sector and the future of freedom. the 10 worst parts of obama- care that are not the individual mandate -- the employer mandate, number one. this is the deterrent to job creation. employers will be required to provide and pay certain percentages for health insurance policies for their

employees or pay a penalty. that was not questioned by the court -- whether the employer mandated the penalty or the tax. it would be wise to anticipate court challenges to the employer mandate. michael cannon has done a terrific work on how states can protect themselves. number two, the hhs mandate. this was not actually in the legislation the legislation said preventive care would be covered at no cost to policy holders. secretary kathleen sebelius, in consultation with the institute of medicine and others decided that that would include free

abortion drugs, sterilization and contraception. the catholic bishops are wisely, i believe, challenging this in court as a tremendous affront to their religious liberty. number 3, new and higher taxes. the law contains at least 20, now 21, totaling half of 1 trillion debt will impact even the sale of your home. the americans for tax reform have a good list on their website of the many taxes in this law in addition to the tax for not paying for health insurance. there is a surtax on investment income. $86 million in the medicare payroll tax. taxes on health insurance, which will increase premiums and

the it taxes on health insurance and the bees we will be paying. the independent payment advisory board. this is of the bureaucrats. there is no need to respond to the poachers. it has huge power over spending in medicare. the goldwater institute is challenging this. as an unconstitutional unelected officials to have tremendous stay over medicare spending.

health habits, in some cases, so they can hand out generous tax payer subsidies for health insurance of our choice for families making up to $90,000 a year. that number will continue to go up. number six, medicare payment cuts. the medicare program is a td bank to pay for the law. -- piggy bank to pay for ala. we can talk about the specifics that will hit medicare advantage plan. these are unrealistic cuts, yet they do pay for the law. higher health costs -- the kaiser family foundation says the average price of a family policy has risen $2,200 since president obama took office.

he promised the average price would be reduced by $2,500 by the end of his first term. i do not know about you, but that is a pretty big market to miss when you are talking about the average family budget and the average family that has already banned hit hard in the recession. number eight, government- controlled over the value systems -- at least half of doctors are considering leaving the practice of medicine rather than practice "mother may i" madison with these rules that will dictate what they are able to provide.

number nine, huge deficits. the cbo has raised the price to $1 -- $1.7 trillion, which is more than originally planned. they watched the final vote that fateful saturday night as the members of congress were talking about the wonders of this law, reducing the budget deficit, getting universal coverage, and by the way, we missed that mark by 25 million people. the deficits will go on and on. douglas holtz-eakin estimates as many as 35 million additional people will have subsidized coverage through the exchanges because of perverse incentives, increasing the cost by another $1 trillion. number 10, at least 159 new boards, agencies, commissions,

programs, that will have huge control over virtually every aspect of how one sixth of our economy, our health sector, works. even if the individual mandate and the employer mandate had been stricken, i believe the authority in this law to create these boards and commissions could easily move us towards government-run, single-payer systems. the miracle is this is three months, four months before a presidential election. the american people will have

their say. i think it is important that they learned that obama-care is a lot more than 26 year-old on their parents' policy, which insurance companies said they would do voluntarily, and smaller provisions. republicans are talking about what they would do to help people with pre-existing conditions. it is now of to us to be informed and to help people understand what is in the law. several of my colleagues and i wrote a book called "why obama- care is wrong for america" to help people understand the impact on families, businesses, taxpayers and freedom-loving citizens. i think it is our duty as citizens to learn. thank you very much. [applause]

>> thank you, grace-marie. next is michael cannon, the director of health care policy studies here at the cato institute, which means he is in charge of health care work at the institute and is the co- author of a book called "healthy competition, what is holding back health care and how to free it." he is actually the principal author and has also worked with me on a new book called "going forward -- health care reform under obama-care." so, i am delighted to turn it over to michael cannon. [applause] >> thank you. thank you for coming today. i am going to talk about how the obama health law is weaker, and

how the path to repeal is more clear than it was one week ago. i want to talk about the day of the ruling. i spoke to a number of reporters. i did a radio program opposite a former obama administration health policy adviser. the host of the radio program asked her she could think of anyone that would be harmed by the supreme court's decision, by the law remaining in place, and she said she could not. think about that. this is a law that is spending two dollars trillion over the next 10 years. it is going to be compelling states, individuals -- , maybe less so states than before -- to be spending further, and this obama adviser could not think of a single person that would be hurt by having the government spend all of that money, much less taking it away

from those that earned it in the first place. there was not enough air time to talk about the ways this law is already hurting and will hurt americans in the future. grace-marie mentioned some of them, like the mandates are discouraging employers from hiring, how the medical device tax will limit jobs in that industry. the robert wood johnson foundation estimated this law will cost 150,000 americans with higher-cost conditions, very sick americans, to lose their health insurance.

some premiums have risen by 20%, 30%, and that was almost immediately. supporters of the law acknowledge that it will cost some premiums to double. the law will and pose explicit marginal tax rates, in excess of 100% on low and middle-income americans. this effectively threatens insurance carriers with bankruptcy for the crime of telling their subscribers how much this law was increasing premiums. there is also how the law threatens religious liberty for -- by forcing them to pay for things they considered immoral. the exchanges to create a race to the bottom by literally forcing insurance companies to provide lousy coverage to the sick and deny care to the sick.

supporters say this is a matter of life and death. i do not think they have any idea how right they are. it is not just the obama administration that is oblivious. after the ruling i spoke to a reporter who has followed american health care debates for decades and i told him repealing the lot is health-care reform because it is hurting so many people, especially the popular parts. the supposedly popular dependent coverage mandate, offering it up to dependants' up to the age of 26. that provision through 6000 spouses and children out of their health-insurance coverage, leaving them with nothing. he said he never heard about that happening. the supposedly popular pre- existing condition inclusion, that has cost 39 carriers to

flee the market, and have caused the markets to collapse in 17 states, leaving parents who do not get dependent coverage at work with nowhere to go for health insurance coverage for their children. we clearly have a lot of vegetation to do but the polling -- education to do, but the polling has been consistent. the public has opposed the law since it was introduced. a recent "new york times" poll found 70% of people wanted the supreme court to strike down all or some of the slot if we keep hearing that is only because people can do not understand the law. i think the people that do not understand a lot is geographically concentrated here, in washington, d.c., and we were planning this forum before the supreme court handed down the ruling.

we did not know what we would be saying when we got here. i was hoping that i would be able to go from talking about all of the ways this lot is already hurting people and will hurt in the future, to talking about the health care reforms that would actually make health care more affordable, that would bring it within reach of low-income people that cannot afford it right now. i did not get my wish, but i am glad that i can talk about how the supreme court made the obama health care law significantly weaker, and cleared the path for retailing it.

it is now clear that the supreme court severely hobbled law. block already give states the ability to block about which the law already gave states the ability to blocked half of its spending. statesrt's ruling gave the power the chance to block the rest of the entitlement spending. state officials have it within their power to reduce the federal deficit over the next 10 years by $1.6 trillion, and all they have to do is sit on their hands, and say we are not going to implement this law. the law requires states to implement the exchanges, and the extension of the medicaid program. the exchanges will channel about $800 billion to private insurance companies. the medicaid expansion will

spend $900 billion over the next 10 years, much of that going to private health insurance companies. states, contrary to popular myth, which has been advanced by a lot of supporters, are under no obligation to do either of these things. they were never under any obligation to create a health insurance exchange, and they should refuse to do either. it is a myth that it states create a health insurance exchange they will have greater flexibility or more control over how the obama held for law takes effect in their state. while it is true the federal government can create a health insurance exchange in the state that does not create one itself, it is not certain because the law does not appropriate funds for them to do that, and republicans in congress are not likely to give them the money to do that. the law also requires state-run exchanges to be approved by the secretary of health and human services, and forces the

secretary to do everything and anything she would get done through a federal exchange, and for the privilege of having the secretary dictate how states run their own exchanges, states would have to pay $10 million- to-$100 million in operating costs, and here are the estimates we have been able to collect for individual states. this is the first year that states have to pay. now, more important, but due to the interlocking nature of the many features, in particular the changes to the employer mandate which taxes and players up to $3,000 per worker, states will be creating exchanges and needlessly exposing workers to that mandate and that tax. why is that? the law is clear on this point. it is only enforceable in a

state that creates its own health-care exchange because what triggers the tax is if a worker goes into an exchange and receives a subsidy and those tax credits and subsidies are available only through state-run exchanges. they are not available through exchanges created by the federal government. the law is clear about this, restricting subsidies to exchanges created by states. states that refuse to create an exchange can therefore block the subsidies and exempt employers from the tax, lowering jobs away -- taking jobs away from other states. the court did hand a lot a serious defeat by striking down its medicaid mandate.

federal medicaid grants comprise an average of 12% of state revenues right now. the law basically said either you expand your medicaid program the way we want you to, incur significant new cost, or you are losing 12% of your revenue. 26 states led by florida challenge the mandate and a one. the court ruled the federal government cannot do that. now, states can refuse to expand their programs without fear of reprisal, and they should. medicaid is ripe with fraud and abuse, and some states put fraud and abuse at 30% of expenditures. my colleague estimates that this medicaid expansion would cost states like florida, kansas, illinois and texas roughly $23 billion each in its

first 10 years, and states like new york would pay more, $35,000,000,000.50 $3 billion. california mix out like bandits. -- $35 billion and $53 billion. california would make out like a bandit. just as this is money that states do not have, the federal government with its current year deficit and debt cannot afford to spend another $900 billion it does not have, and states, and this includes california, can expect that whatever these projections say right now, costs will exceed initial projections. the moment the u.s. credit rating suffers another downgrade, congress will shift more costs to states, predatory federalism.

congress gets the state out on this low introductory rate, and the soonest they are up, they change the rates -- as soon as they are hooked, they change their rates. that is essential to repealing this law. before that even happened, governors were expressing their refusal to do so. governor rick scott in florida was the first one to refuse to exchange -- create health insurance exchange after the ruling came out. governor bobby jindal in louisiana has said the same. governor scott walker in wisconsin has said the same. other governors are making similar noise.

26 of them sued the federal government because the cost of the expansion was burdensome. you could get some of those, if not all of them will refuse to take on those costs. it is not that you need a governor to do this for you. remember, we are talking about states passing laws to implement a federal law. all that it takes to be read all these new federal entitlements is one committee -- de read all -- derail these federal entitlements is a state legislature, or a veto, and you begin to see just how vulnerable law is right now in the wake of the supreme court ruling. i think the public is likely to reward officials that do block the fomentation of this law. before the ruling, 70% of independents one of part or all of the law struck down. given that the courts invented slippery rationale and i will not say for upholding, they did not uphold the law, but declined

to strike it down. because there was slippery rationale for leaving the slot on the books, i think a backlash against obama-care is likely to grow. as i said, the obama health law is weaker and the path to retail is more clear than it was last weekend even though i am disappointed in the court's decision, like the set, the path ahead is clear. thank you. [applause] >> last up is avik roy, a senior fellow from the manhattan institute. he is one person why make sure i read every day -- who i make sure i read every day because it is really boring and in depth into the law.

i have read all 2500 pages. if you have not read all 2500 pages, you will get something out of the digging in on that. he is also an adviser to the romney campaign on health care, and god knows he can use all the advice he can get. [laughter] we are happy to have him with the. and i will turn it over to your. >> -- turn it over to you. [applause] >> he mentoring in terms of drilling down thank you for having me here. i should expose i am adviser to the mitt romney campaign.

i do not speak for the campaign. having said that, i am very glad to be here. the cato institute has been at the forefront of opposing the individual mandate from its earliest days, not too far from here in washington, and it is an appropriate to have an event like this. i am here to let you in on a secret. the individual mandate is too weak, requiring that every american with some exceptions buys health insurance, or pays a fine. i did not subscribe to the idea that it is a sex. it is a fine that max's out -- is a tax. that max's out to 2% of your

adjusted gross income. remember, the average health- insurance policy for a family in america in the private market costs $15,000 a year. thanks to obama-care now, as the president reminded us last week, you do not have to have insurance to get care because if you get sick you now have a pre-existing condition, you can go to the hospital, buy insurance that day, and the insurance company has to except you. so, if you have a choice between spending $15,000 on health insurance plan, or $695 to get the same care, which will you choose? i think the choices clear.

this gets to the heart of what obama-care is, and because of the constitutional challenges and the controversy to the related aspects of the law, it has been completely missed that this law will massively drive up the cost of health insurance in the private market, effectively destroying the private health insurance market and less significant reform or repeal takes place what -- takes place. what it comes down to is obama- care inverting the laws of health economics, and the key principle to understand here is adverse selection. what happens in insurance it is -- let's take the example of homeowners insurance let's say you have two people that own homes of relatively equal value. one person lives in a neighborhood where a lot of arson attacks take place, and another person lives next to a fire station in a town with low crime. the houses are of the same value, but one is at lower risk to burn down. should they pay the same for homeowners insurance?

classical economic theory should be that they should not. the person that lives in the higher risk area should pay more for the person -- than the person who lives closer to the fire station. it is a matter of economics. if i lived in the home next to the fire station, and you told me i have to pay the same, i would say that is not a good deal. i will pay more for my insurance than the actual risk my home is going to burn down. i am not going dubai that insurance plan, and that creates adverse sellout -- i am not going to buy the insurance plan and that creates adverse selection.

the average claim as been much higher, and the cost of insurance goes up because insurance averages of the overall expenditures for the group and insurance continues to get progressively expensive. people vary in progressively safer but moderately riskier areas opt out, and the insurance market goes away. that is exactly what obama-care will do in the private insurance market because the americans who will be forced to pay this mandate find no it is a better deal for them to pay the fine than to buy insurance. that is not the only aspect that it celebrates the problem the law does something called community rating, which forces young people to pay as much as 75% more for their insurance so that older people will pay

slightly less. the law has coverage mandates. it must cover contraceptives, drug abuse. it has all of these things they you may not need, but you will have to pay for. it is like going to the restaurant and being told you have to have a seven-course meal even if you only wanted four and do not light seafood. those are the economics we are talking about 10 every one of those requirements, those mandates drives up the cost of insurance. everything that makes insurance more expensive makes it a raw deal for the young people that are not insured today. that is the key thing about the uninsured population. the uninsured population is predominantly young. 55% of people without insurance are under the age of 35. 72% are under the age of 45. they do not buy insurance because government regulation

makes it too expensive for them. the congressional budget office did a study asking why people are not insured. 71% said it is because of high costs of insurance. 76% said their employer did not offer it or they are unemployed. only 4% said they wereonly 4% sg rejected because of health status. the best majority of uninsured people are not on insured because of pre-existing conditions. insurance is too expensive, and it is too expensive because of government policies. obama-care is exhibit a. it does everything precisely almost as if it were pre- designed to destroy the private insurance market. so, that is the first problem you have to understand about obama-care. the preservation of this week

individual mandate and all of the other aspects of the law, the insurance regulations the president touted, those things sound nice in theory for the people that benefit, but the 99% of the people that do not benefit, they will have insurance go up, and insurance is not cheap today. the average income is $51,000. the average insurance plan is 15% -- $15,000. that is 29% of income. in the last year, health insurance went up because of obama's regulations. think if your tax burden went up 9% every year for the next 10 year. what would you say? that is what obamacare is. it is not a tax. it is forced allocation of your own money to insurance and health care, and that is ultimately the biggest problem with the law.

the supreme court, as others have noted, allow states to opt out of the medicaid expansion of a lot. -- of the law. by this keystrokes, he may have expanded the federal deficit by $500 billion over the next 10 years and expanded unfunded liabilities by trillions. the reason for this is lot -- the law expands coverage in two ways. one is by expanding medicaid for the poor, and also by creating the subsidized exchanges, but the eligibility for these programs elapse. -- overlaps the poverty levels. the exchanges are much more generous. they spend a lot more per person than medicaid does. it is all federal dollars which is all federal dollars. states -- is all federal dollars. states have the incentive to

pare those programs back, and put people on exchanges. will get more generous coverage at the expense of taxpayers and other states. douglas holtz-eakin, a former director of the cbo, who was brought earlier, has estimated that this could cost as much as $1 trillion over the next 10 years, but a more realistic scenario is $500 billion over the next 10 years. john roberts did not just reinvented definition of taxation. he also added $500 billion to the deficit last week. finally, i would ask to talk about what are the real solutions that governor mitt romney is promoting, and proposing, and why should those that believe the market- oriented solutions seek to achieve? the most important first principle to understand is there is a lot of

misunderstanding about american health care. we hear rhetoric that american healthcare is the best in the world and there was nothing wrong before obama-care. it is true that american healthcare is good in many ways, but many things were wrong with it before obama-care. before obama-care, governments spend half of expenditures in america. before obama-care, governments spend more per capita and health-care than all but two other countries in the world, luxembourg and norway. we spend more than france, the united kingdom, germany. their governments spend less per capita than the united states this is not a system that is sustainable. it requires real change. the principal theme of governor romney's proposal says put individuals and localities in charge of their own health

dollars again. with medicare, but seniors in charge let them choose a plan that is right for them. with medicaid, let states and individuals control their own medicaid dollars, and with the private insurance market, we need to move to a system where people own their own plan, instead of having them determined for you in terms of where you work. individuals on their own plans, you can keep it when you lose your job, shop for the plan that is right for you instead of applying the plan that was chosen for you, and in that way we can move to bring the cost of insurance down. if you bring the cost of insurance down, you make insurance more affordable and more people could afford to have insurance and you reduce the problem the right way.

with that, i will yield to questions. [applause] >> thank you very much. as you were talking about homeowners fire insurance and adverse selection, i am reminded that the insurance toll was by -- sold was by benjamin franklin in philadelphia, and the charge people in brick houses lower than those living in wooden houses because the risk was lower. exactly the same sort of thing you were describing. with that, we will open it up to the floor for questions. we have a bunch of them. i will ask until you are called on and the microphone comes to you so that the folks on c-span and those listening to this in light streaming can hear you. identify yourself and your organization you are with, and ask a question, do not give a speech. i will start this way, and then

i will move to that said. let's start right there. yellow shirt. >> thank you. annabel fisher, a licensed independent clinical psychotherapist, so i would like each of you to outline an insurance health care plan that would be acceptable to all of you, because if we are all going to pick our own, and doctors are not going to except medicare and medicaid, what health insurance plan would each of you design that will not cost a lot of money for the patients and their families? >> i do not know how did this sign health insurance anymore than i know how to design a suit or my car. i can tell you what i've value, but that is not of general interest dared -- what i value, but that is not of general interest. if your question is what kind of health-care reform do we like

to see, and how will we manage people to the health plans that they like, i think the answer is simple. let people control earnings and remove barriers to competition among insurance companies and health-care providers so they can offer different plans, different benefit structures and ways to deliver health care. most of the innovations we hear people talking about in washington, d.c., trying to get the government to impose or subsidize already exists in the market in the united states today. they are stifled by regulations that prevent them from spreading. where we have given market forces to create -- room to breathe, we have seen remarkable innovation, and my preferred health care plan is not available in the region i live because of those regulations. >> one of the things we would

say is there is no one-size- fits-all plan. michael and i might have different desires. i would like a plan that has a high deductible for catastrophic illness. somebody might be risk-averse and do not want to take a chance. some people might want to cover more preventive care. other people do not believe it in that stuff. we should be designing for ourselves. >> i would hold-hardly agree with what michael tanner just said. healthcare is personal. we all have different risk and different needs. maybe people in our family have conditions that require more comprehensive insurance. you do not want the government dictating that. that is the first point. in america in general, we do have the problem of over- insurgence. to many people have benefits they do not need a imagine a

world in which we went out to eat every day instead of cooking for ourselves and going to the grocery store? obviously, if we did that come our food consumption would be more expensive but not with more nutritional value. that is true with health insurance as well. we buy these expensive plans that are more expensive than we need. most people would agree that more people than are currently should be on high-deductible plans. we should encourage people to save money for their health care because that creates a virtuous cycle where you get rid of the moral hazard. you have an incentive to practice healthy habits. it would be great symbols to a system that encourages more people to get on those types of plants. you got government out of the way, you would see more of those.

>> in a country of 310 million americans, there is absolutely no way that government could come up with a plan that is going to work for everybody, and that is the difference between our perspective and the perspective of the drafters of this law that have come up with gold, silver, platinum, bronze plans. they think they know better than we do what we need, and the problem we have in this country is too few people have an opportunity to choose the kind of health plan that best suits their needs and the needs of their family. most of us talk about changing the incentives and the financial arrangements so that people have more control over their choices, forcing the market to offer them more choices, moving to a defined system of subsidies for people at the lower-end of the income scale, and giving the market an incentive to respond. i think there are probably thousands of more options than a lot of us fought.

-- thought. when walmart decided it would give employees a choice, they had something like 25 different plans, and they made easy to make decisions because they went down a decision tree. the most important thing is to transparency, so people understand the cost of their choices, which they do not now, and then they begin to make more sensible choices about the kind of trade-offs, making sure they are covered when they get sick, but do they want all of the bells and whistles? they need to know they're going to pay for that. [unintelligible] >> with regard to increasing costs and try to reduce costs, one thing i never hear people

talk about, which i think would be dramatic in terms of reducing costs if we could -- would be if we could give rate of licensing rules for doctors and prescriptions with the idea that you could decide which of devise a computer program -- with the idea that you could devise a computer program that would self-diagnosed yourself, and if you are not comfortable with that, you could hire someone knowledgeable in the program without hiring a doctor. how come that is never brought up? >> that is a fantastic illustration in the differences between obama-care and markets. obama-care tries to reduce the cost by subsidizing, and they're not reducing them, they are shifting it, hiding the premium.

when you shift costs, and that does not reduce costs, it increases costs because it encourages -- it discourages responsibility. most people will tell you they support licensing of doctors, the research has shown that licensing does not increase the quality of care. it might increase the quality of care for some individuals. broadly speaking it reduces competition in the market for clinicians, not just doctors, but also nurse practitioners and other mid-level conditions, and it restricts what they are able to do. and their competitors bofa our

competitors with doctors for certain services -- and they are competitors with doctors for certain services. these increased the cost of health insurance by forcing a low-income people to pay more than they need to because nurse practitioners are more -- are competent to do more things than the licensing regime will let them do. the way the markets make things more affordable, bring within the reach of low-income people come up items that were out of their reach yesterday, is tall clay christiansen, a harvard professor and some of his colleagues explained, is allowing people with less training to do what only people with higher training and who cost more could do previously. so, what you are talking about has been advanced by a lot of people. instead of having doctors provide all of these services, why could nurse practitioners

not make more diagnoses? it is not they would get it right all the time, but they would probably get it right as often or even more than doctors. this type of experimentation and cost-saying and a date -- cost-saving innovations is bottled up by laws like this. obama-care is only going to lead to higher cost, as opposed to the promise of making health care more affordable for low- income people. >> in the back. white shirt. >> thank you. i am ryn -- ryan. i believe when he said shifting to a value-based system is one of the problems, where doctors are paid for the quality of

their care, those things are causing a 50% of the doctors out of the workforce. i would like to know how that figures in and why a value- based system is not as beneficial as a fee-for-service system. >> we might have some debate on that subject. grace-marie? >> of course we won a value- based system, but the way we structured this is a with basically a new name for hmo's in which doctors and other health-care providers are incentivized to provide less care in order to increase their profits. it is not transparent. oftentimes, seniors will not know they are being enrolled in

plans in which doctors have those perverse incentives. doctors do not want to be in that compromised position. of course we want value-based payment systems, but we do not want them as they are defined in this orwellian term in this house law because it will give doctors an incentive to say let's put this off. that might be fine, except the doctor can still get sued if the patient thinks they needed that service. we are not making fundamental changes in the system that would change the transparency and engage patients as partners in getting the best value for their health care. instead, we are going to try to do this with more rules and regulations and bureaucracy, which is not going to work. >> i think the answer to your

question is who defines what value is? is it going to be you or the government? there are different ways to define value and quality. some people like to be able to choose their doctor. that is one dimension of quality. others want to e-mail their doctor. that is more important. some people value getting all the medical care that could help them. some people are more worried about avoiding medical care that is not necessary. there are trade-offs. who will make them for you? if you are a senior citizen right now, medicare is making those decisions for you, and day care on the side of keeping you lots of doctors the day care on the side of giving you -- day care on the side of giving you -- medicaid is making decisions for you and erring on the side of giving you as much care as they can. it is the government making those decisions under medicare, and under the value-based purchasing programs in the obama health-care laws, the government will be making those decisions for more than just

seniors. if you want to know how good of a job the government is quite to -- is going to do, let them medical errors we have seen, the research that shows that one- third of expenditures are wasteful. we are exposing seniors to medical care that is not helping them at all. do you want the government making that decision for you? if you get to make those the choices, then i get to have the health care that i want, and the competition forces others to improve on areas where they are weak. >> i could just add one sentence. if you are controlling your own health dollars, these patients- at centered systems will leave all that happened organically the government has proven they are incapable of making this work. we would all agree the fee-for-

service over-incentivizes the fee-for-service. if you pay for input, they will give you a lot of input. on the other hand, the hmo model, it incentivizes under- treatment because the doctor will get the same amount of matter how much is provided for you and there is no incentive to do the extra thing. what you want is both in the marketplace competing with each other, not imposing one model. blue shirt in the middle. we have plenty of time for questions. do not worry. >> i have no defoliation. -- in affiliation.

-- no affiliation. it has been pointed out how states can refuse to set up the exchanges, but the insurance regulation parts, the individual mandate, it will not be stopped by debt. -- by that. they can destroy our insurance. . is there any realistic way to stop that, and assuming obama gets reelected, under that assumption, and perhaps republicans keep control of the house, take over the senate, but not with veto-proof majorities, if repeal is not an option, is there a realistic way? >> it is a good question and a great concern. remember, the health insurance price controls in the obama

health law, what we call the pre-existing conditions, those conditions caused the markets to collapse in 17 states and they are causing the markets in another 18 states to collect slowly. so -- collapse slowly. so, that is the potential of what could happen on the entire market in 2014. the case is made that we will see a lot of adverse selection even within the individual mandate in place that is designed to force good risks to pay the inflated premiums that those price controls forced upon them. i have done research with a taliban has found in the region with a colleague that has found -- with a colleague that has found that if people pay the penalty, they can save up to $3,000 if they are an

individual. per year. even with those penalties in place, it still makes sense for healthy people to opt out of the market. so, it states block the exchanges, and there are not those tax credits available, could that lead to adverse selection? yes. actually, no. it is the health insurance price controls that are leading to adverse selection. when the tax credits and subsidies, if available, mitigate those, perhaps not, but even with those tax credits in place, i think the financial incentives are such that the market is going to collapse. all we are deciding is how quickly that is going to happen. if it happens, and states refuse to create exchanges, then everyone is going to see the writing on the wall.

the insurers in new the provisions were going to -- new the with the provisions would destroy the market before they took effect, so the insurance pulled out of the market before they had to comply with those provisions. they will know this is going to happen in the broader market. it forces congress to reopen the law before anyone gets hurt, before the spiral starts, before the law creates incentives for insurance companies to provide worse at providing care. if they are the best at treating the sick, they attract people that cost hundreds of thousand

dollars and they got a business. states could throw this back to congress. you ask the question of obama. i leave it up to him and what he is going to do if his lot is going to call and because insurance market to collapse. is he going to let that happen? i do not think he will. i think faced with 100 million americans facing the prospect, he would let that many go without insurance. he has some power at throwing people out of health plans, but i do not think it is that high. >> one comment on the decision from justice robert. it was astonishing to me he said in deciding the mandate is

a tax, he said this is a neutral choice. people have the choice of purchasing health insurance or paying a tax for not having it. he said this is not the penalty. there is no value judgment. it is putting it on the skills and making a decision. people will say if this is in neutral decision i am going to pay the tax, especially because i know the health insurance company has to pay me excel make a policy at the same price as someone else has been paying all along. he said this is in neutral choice. >> are you german or french? israeli.

with the eurozone crisis, nobody wants to let the greeks go. they are trying to have greater fiscal union. they're not going to get rid of the law because they word about the private insurance market going away. they are going to triple the fines associated with not buying insurance. they will increase the fines or enroll you in government- approved insurance plans. they will not unravel their prize architecture because a few companies go bankrupt. the only way to get rid of the law is to elect a republican president and senate. sorry. >> the blue shirt. >> i am representing myself. i was going to ask about forcing

doctors to do things. i remember when i was a kid, if i get sick, my parents. the doctor. they have no insurance. explain how it came about that paying for health care became different than any of the service or commodity in our country. >> michael tanner has a chapter in the book where we go through the history that protect people from understanding the full cost of their health insurance and health care. it started in world war ii. it is the foundation for the employer-based health care in our country. after several generations, people assumed someone else pays for your help care.

there have been studies showing how much that illusion costs us. he has concluded the income we lose because our employer is taking part of our paid to purchase health insurance, the part of the premium we pay in addition, the taxes we pay, and our out-of-pocket cost for the average american family pays $25,000 a year for the illusion we get free health care. >> there is a reason for insurance, to protect against large catastrophic costs. if you have a heart attack or cancer, the average person will not be able to pay for the doctor or surgery. it is just like homeowners insurance, life insurance, or any other that protects you against risk. the question comes when your pre-paying routine costs up

front. then you are just paying the insurance companies a profit for doing it. green shirt. >> i am a retired army physician. from the point of view you are proposing to and from your adversaries on the left, when the dust settles, what will happen to the metta medical health care system including the va system? >> i am glad you brought this up. one of the fastest-growing items in the defense budget is health care. not just the veterans administration budget but also the defense department. both are going up considerably. because they are separate systems from the conventional

health care system, it does not attract as much attention. it is a considerable issue. they're a been a lot of claims from people who have come back to moroccan afghanistan that the plan is inadequate for their needs. because they served in the military, the promises made to them when they come into the military in terms of health coverage are not being met. i think a lot can be done to integrate the military and va health systems into the rest of the health care system. in the era of world war ii, it made sense to have a system of va hospitals that were specialized. i am not sure if it makes sense today. i think it would make more sense to say if you are a veteran, we will give you a generous amount of money to buy your own insurance plan.

they can choose to have you treated at the va or any other hospital. we will give people more freedom and choice. we will also create more competition among providers. a big problem in the system is people like to blame the insurance companies because health care is expensive. they are the messengers. it is expensive because hospitals charge insures -- they say they will jack up the price 25%. if you do not pay it, we will not take your beneficiaries. if they provide more efficient care, if you have the competition that would benefit both sides of the equation. >> on the side of the aisle. >> i am the author of a book on why we do not have a welfare state. we have a special interest state.

that is my question. i have not heard discussed corporate players, the hospitals, doctors and insurance companies. how are they going to participate in this political debate over the next few months? michael? >> they have been quiet. they have been keeping their powder dry. figure pardon. -- big your pardon. there is a lot of apprehension by the insurance industry leading up to the supreme court ruling. they are concerned if the individual mandate gets knocked out, the business model would collapse. they were up. -- preparing for an assault on a pre-existing provisions if the supreme court had done the right

thing and start down the individual mandate. -- struck down individual mandate. if states block exchanges and prevent -- deny the federal government the authority to issue tax credits and cost- sharing subsidies, they will activate the way they planned to if the supreme court struck down the mandate. they will put pressure on congress to reopen the law. they may want congress to spend more money on that. they may want congress to increase penalties on individual mandate. the complaint -- they complained the penalty or taxes were not high enough.

they would be taking those to congress that will probably have at least one chamber committed to a party committed to repealing the law. there may be a deal struck with the insurance companies get something but the republicans go farther than the insurance companies would want. >> you have barack obama standing for the american people on one side and all of these big bad industry folks, insurance companies we all hate, but pharma, the doctors' groups on the other side fighting him. they were all on one side cutting deals with each other and the american people were on the other side. >> i would simply say a lot of industry stakeholders do not favor freemarket reforms for this reason. we spend more per capita on health care than any other

company -- country. if there is a market system that encourages individuals to allocate money more efficiently, a lot of that will go to health care. >> there are six major pharmaceutical companies. they began the conversation that cold industry into the obamacare negotiations. in the case of every one of those six companies, the ceo departed or left under other circumstances, as well as pharma. your humble whole different team of people that are going to be a misreading the next phase. they're not as invested as the folks who made the deal in the

first place. >> i will take you and in the last two. >> i would appreciate it if you could elaborate on governor romney ' as ideas on health care lobbying repealed under this of administration. >> as i said in my formal remarks, the main thing is to give localities and individuals more control over their health care dollars. with medicare, the goal is to do something similar to the ryan plan that involved giving

seniors a choice of health insurance plans and the traditional service that competes. they would bid for your business. they say we will cover this set of benefits for this price. there would be an index. maybe the average price would be calculated. if you purchased a plant that was lower, it would save money. you could spend more. there would be market pressure toward being more cost-efficient in your insurance plan. with medicaid, the idea is to block grant medicaid to the states. this was a successful approach we used with welfare and 1996 that has been hailed by both sides as a success. the program is micromanaged out of washington this sort of managed by the states.

washington bureaucracy prevents states from enacting common- sense reforms that would allow them to allocate medicaid dollars more wisely. in illinois, a state run by democrats, illinois is under a huge budget crunch. they were trying to reform the medicaid program. medicaid is the number one item in their budget. in illinois right now, you cannot check and applicants residency status. if they submit a piece of paper saying they have a certain income with one pay stub, those can go up or down. they did not have to prove residency. they passed a law saying you have to show utility bills and portrait paychecks -- four paychecks to get a sense of your income over time. it was blocked saying it is illegal under the affordable care act.

this is a democratic administration in illinois. states would be able to run the systems more efficiently. with the block grants, the idea is to eliminate discrimination in the tax law. because of the wage controls, if you get insurance through your employer, you do not pay taxes. if you buy insurance for yourself, you are doing so with after-tax dollars. you have already paid medicare and social security tax. you want to change it so the tax breaks is equal for people who get it through their employer and people who do not have the opportunity. you can buy your own plan. if you are unemployed, you still get the same tax break. those are three things. it is making sure the fda is doing a better job of getting

innovations to market. that is a big part of what the american market does well at its best. it can make health care better for everyone. >> when i hear governor romney talk about health care, and would describe my attitude as skeptical. one thing that concerns me about governor romney is when he talks about what he would do when he becomes president, on the first day he would work to repeal obamacare. he says by giving states waivers from obamacare. i do not think he can do that the way most people understand that. the president does not have that power. i think what he might name is he would give states waivers like he got from the bush administration when he put romney care into place in 2006,

which was the model for obamacare. i am concerned when i hear that from the romney camp. i would just offer that. whethers me wonder governor romney really understands the dangers obamacare poses. >> i am concerned as well. half a trillion dollars in taxes and medicare cuts. he cannot waive the exchange's anymore than the president can decide to ignore immigration laws congress has set. i am concerned he is saying he will waive a magic wand when you have to make statutory changes

for the changes he wants. >> i want to put everyone's concerns to rest. the governor's point about the waivers is, what if there is a democratic senate? there is no guarantee we will have a republican senate. the one thing he can do as president without consent of congress is to do as much as possible to liberate states from the new regulations the affordable care act imposes upon them. that is what he means when he talks about the executive order. he has stated he will sign the repeal bill as soon as it is on his desk. before i joined the campaign, i wrote a piece saying, is romney committed to repealing obamacare? within 10 seconds, the press boat -- the romney press folks were on the phone demanding to know how i could have written

that given the government has -- the governor has said repeatedly he wants to repeal obamacare. i said all of these things about the waiver and other things. they said he wants to repeal obamacare. what about reconciliation? is he in favor of repealing it by reconciliation? they told me they did not know if you have 60 votes in the senate. the policy adviser said we do not know if we can repeal obamacare by reconciliation. it is a hypothetical we're not prepared to answer. the next day at a debate in north carolina, governor romney said he would repeal obamacare they are reconciliation if he had the opportunity. i am 100% convinced the governor is committed to repealing obamacare. but we have to do the hard work of giving him a republican senate. >> i am not convinced.

the president has been duplicitous about health care reform. he was against and then for individual mandate. it is a tax it is not a tax. i would have been impressed if governor romney had said his first act as president would be to rescind the ira's rule that tries to rewrite the obama health was by issuing tax credits and subsidies in the federal exchange and thereby taxing employers who would otherwise be exempt from the mandate. the irs issued a rule that employers could spend hundreds of billions of dollars without congressional authority, all to save the obamacare lot from these big holes. >> i will say the campaign is

well aware of your excellent work in this area. >> that would be an aggressive signal the governor is committed to getting rid of the law. >> please ask your questions. we will let the folks appear answer. then i am afraid they will cut us off. >> michael willy, disappointed libertarian. i recently worked at the illinois policy institute. we did work on medicaid. at the beginning of the decade, we had one in eight on medicaid. at the end of the decade, we had one in five. if obamacare is fully implemented, we will have one in three on medicaid. how do we convince the governor

to not -- how do we convince him to not go ahead with the medicaid expansion and exchange? >> could you give us some insight on what you think the impact on supply will be. >> a and a theater critics reply and the theater critic -- i am a theater critic. i want to know what the independent advisory board is. i hear about it. unelected the officials have unfettered power. they can submit these proposals. they can automatically become law even if congress does not vote to support it. i understand that part. what is it? why is it?

what can it do that is so nefarious? >> i will ask you to each answer one question. you can do medicaid. michael can finish up with what he wants to say and address supplier. >> one of the 159 new boards and agencies in the law. there is a great sense in congress it is too hard for them to figure out how to reduce payments to medicare. they needed to create a board that was sort of like the base closure board that was apart from politics, able to look at the data and decide what needs to be done to get costs down. they have not yet been appointed. one reason why senator mcconnell is keeping the senate in session over the recess is to keep the

president from making recess appointments. even if they do not appoint the board, the secretary of health and human services can be the default decider. payments can be reduced to save money to reach 30 quotas and medicare. one thing people do not realize is obamacare puts medicare on a global budget. that is what european countries have. somebody has to enforce that. and elected officials have the power to decide what needs to be cut from medicare in order to reach the financial trigger points. it is difficult for congress to override it. there is no judicial review. that is one of the reasons the goldwater institute is suing. you have people that will have authority over hundreds of

billions of dollars of medicare spending who are not elected by the people. that is not constitutional. >> they cannot deny any particular treatment or type of care. they can refuse to reimburse it. >> the president has doubled down on that. he wants to reduce further the ability for this board to reduce payments to doctors, hospitals, drug companies, and others. >> this is the world providers will live under if the help lot stays on the books. we're talking about a super legislature, a group of up to 15 unelected government officials who will be able to change

medicare, medicaid, and insurance payments. they will be able to ration care. they will be able to raise taxes if they want to. there are prohibitions on many things. those are meaningless and unenforceable. the statute requires the secretary to enact these proposals they are not really proposals. they are laws. the ticker is if the president does not appoint anyone to the board or the board does not come up with a proposal, all of these powers of the board, these people can appropriate funds to their own department and execute laws they have written. this is the road to serfdom played out before our eyes. it has been argued it is a threat to freedom and democracy

because congress does not do a good job of planning for the economy and health care. people complain politics is corroding the process. they say we need a panel of unelected experts to take care of this. when that does not work, they say we needed economic dictator. that is what is happening. >> let me tell you the story of the 12-year old boy who grew up not far from here. diamonte was a seventh grader who lived on the wrong side of the tracks with the usual problems. he was homeless from time to time. he grew up without a father. he was on medicaid. his mother found out one day he was complaining of toothaches, so she tried to give him a dentist appointment. she could not find a dentist who

would take him because medicaid, in order to cover as many people in the cheapest way, pays physicians 58% on average and in some cases much less than what they would get from a private insurer. a lot of doctors do not take medicaid. you have this insurance but cannot get a permit with a doctor. she finally managed to get a dentist to see him. he had six abscessed teeth. he needed to go to research and to get these teeth pulled out. -- he needed to go to a surgeon to get these teeth pulled out. it was another two wants to see a surgeon. the abscess had spread to his brain by that point. he had to go to a neurosurgeon to get the infection taken out of his brain. that took another month. by the time he was ready to have

the appointment for the surgery, he died. this is a 12-year-old boy, poor, homeless, who died not because he was uninsured, but because he was injured by the government. i bring this up to say you will convince conservatives not to expand medicaid because they have the ideological opposition to government programs. the way you persuade americans to be worried about the expansion is explained to them that health outcomes for people on medicaid are in many cases worse than for those with no insurancd