[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2014] president obama's adviser i benefits for three months.n th them more time to develop a long-term solution to the problem. this is a half hour. >> thank you. tha thanks, jay. there is no question that we go into 2014 w with more economic w men item, unemployment rate is down to 7%. we had more than three million private sector jobs in the lastg year. we've seen housing prices up about 13%. that there is no question that

we need to ensure the economy has more momentum and we'reentu having a recovery that leaves no one behind. in terms of job growth, there is no question there is opportunith to move the ball forward as a country. the president has put forward a grand bargain ono on jobs that o combine and have a minute minimn solution. we are working onrm housing refm on immigration, on manufacturing. there is also no question that we have to make sure this recovery does leave no one behind and that means addressing what is clearly, perhaps the worst legacy of the great recession, which is the long-term unemployment that we

still face in our country. hort- who are d, those hort- long-term unemployed continue to ace a very difficult liberal mark market. who stay w that those out of the liberal force too serious n suffer economic and psychological a country have to be committed to doing help those e can to who are long-term unemployed find new jobs to support their families, get them back on their feet. that is going to take an attack all fronts on long-term unemployment. one, doing more to more momentum ry so there are more jobs so it is onethree people looking for

job open but has many more jobs created. in partnershiprk with c.e.o.'s in our country to ake sure we are all working in partnership to give those who are long-term unemployed the opportunities possible to a chance at a et new job. we have been working together in a partnership with many of our the ry's top c.e.o.'s and president will, in the coming weeks, have more to say on that. the ly, we have to give basic support for those who are out there, who have worked in and are out there every ay working hard to find a new job. we as a country, we are a that has each other's back in hard times. , have all -- we have never over the last half century, cut

unemployment benefits when long-term barely ment was even over half the rate that we have now.t now is not the time to start. what you today is. oday is the day that 1.3 million americans start going to their mailbox and find that the expected to get today is not there. that is a temporary life line for families who are employment, a m check that puts food on their gas in d perhaps the their car they need to drive to interview for a new job. day.y is the today and tomorrow is the day empty and x will be those families will find it -- hardship in covering necessities.

over 2014, over the whole year, with be 4.9 million eople who would find their emergency unemployment benefits cut off at some point. an e 4.9 million support additional nine million. so this would affect 14 million the course of 2014. and tomorrow ay are the days that the 1.3 find n americans will their temporary life line not in is also thex, today day we have a chance to do something about it. piece of bipartisan legislation supported by jack reed andator republican senator heller from we should says extend emergency unemployment right now.onths this will obviously give us more time to figure out what is the

deal with a longer solution for 2014. act right now to help those 1.3 million people. fact, in these three months that number would grow to 2 million america americans. talked to senator heller on frid friday, and he said, you know, r him this was not idea was talking to constituents every day that were often in economic stress who desperately wanted a job and a erstanding that we are other's hat has each back in these difficult times. i want to say just two points questions that are important to recognize. number one, you are only emergency r unemployment benefits if you are actively looking for work.

actually help encourage people to stay in the workforce because et discouraged they have to be actively looking for work to be eligible for the benefits. this is a popular word among those who cover the fed, employment y difficulties are designed to taper off as unemployment goes down. example, when you talk about the fact that we have 46 weeks, that is only for a state that has over 9% unemployment. your unemployment goes benea weeks 9% there are 10 less available. under 7% unprompt there is nine available. under 6% there's an additional 14 more weeksen available. this is not designed to go on forever. temporary life line in difficult times that our country has relied on for well over a

, and the president feels very strongly that this the support both democratic and republican senators senators, bipartisan proposal to extend for three months and we this should. this deserves to pass. you know republics want this offset $6.5 billion for the months. is the administration open to $6.5 iating an offset of million for the three months and sing that to offset the much larger cost over a full calendar year? an urgent just situation right now. we have, as i said, today is the people have been cut off, but today is the day they find the check not there. president believes that we withd pass this right away

no strings attached. that is more in line with precedent than anything else. 14 of the last 17 times in 20 ears that it has been extended there have been no with strings attached. times that the previous president bush extended mergency unemployment benefits there was no pay for strings attached and the unemployment those s lower each of five times than today. compromise that the that is inherent in the he heller-reed bipartisan egislation is let's move quickly and pass this three-month extension now. his will help americans immediately and this will give us more time to have a larger about what happens after the three months are over. you willing to offset a calendar year if not the three months? offsetting sed to under every circumstance? >> what i said is let's move

anckly now because we are in urgent situation. we didn't get it posted in december. the step now, we will -- that will leave more time to discussion about you est to do it over, know, for the remainder of 2014. >> you wouldn't rule it out? on our focus right now is the legislation that is up there. it is the only bipartisan plan been there. there's been talk but there is that is tisan plan and to stand three months on an emergency level. want people to support with the understanding there will be time to discuss tdo when this three months is over. the white clarify, is house opposed to negotiating adjust soffset. i know you want short term do it now but do republicans draw a ine they are saying right now they at the present time offset. is that something the white house won't even negotiate on?

>> our focus right now, john, is to get this passed. i want to point out, as i have said, this is the day -- been cut e already off. whole are right now, today, ay be got as little as $150 a week, or maybe an average of this was their life line, their basic support. have the first bipartisan proposal, when it with be passed right now no strings attached, when that s consistent with the overwhelming precedent before, the clear right thing for us to this ht now is pass measure now in its current form nd again it is just for three months because more time to have those -- you know, further discussions about what else you might do to extend it after that.

april. gene, what do you say to republicans who are not necessarily worried about the not that some people are getting their insurance benef s insuranceunemployment benefits today, they are worried about the fact that things are we are out of and recession and it saves money not benefits.the what do you say to those republicans? extending the , is the right thing to do based on our economic values. neighbors, fellow parents struggling to get by. it is also the common sense thing to do economically. that been estimated extended nt insurance in 2014 would mean an additional and additional fifth of a percent of growth. people have estimated that for

you put in the pocket of somebody in this situation, ittress leads to a multiplier of $1.50 in the economy. so it is smart economically. just the right thing to do. what i would say is the reason mental unemployment enefits like -- emergency unemployment benefits over democratic and republican presidents is we understand that when unemployment is at a low level one can assume that able to le should be find work in some way. unemployment benefits to 26 weeks. ut when you have nine states that are over 8% unemployment, hen you have rhode island and nevada at 9% unemployment, when of have historic levels long-term unemployment, you tphknow just millions of

people still who are desperately work.g for they are eligible because they were working before. they are looking for a job. this is not their fault. they are not the ones who were packaging subprime securities. they didn't ask to have a grave recession. hey didn't ask to have to struggle with some of the hard log sis. legacies.y is that -- we are pleased that the economy has more momentum. pleased to see unemployment coming down and coming up.tor jobs but again, we work for a president who wants a stronger wants recovery that leaves no one behind. we can be an administration that just comes in herein and tells you -- comes in here and tells that happened ws or the improvement. ut that is not what we are about. we are about helping people who are hard working, responsible

nd want to get back on their feet. that is why we're willing to point out that even amidst the we have economic news seen and stronger economic toentum there is a challenge long-term employment and we care about those people and we are going to do everything we can to help them. >> have you personally talked o some of the republicans to change their mindset has i it relates to the extension of benefits?ent >> i would say many of us have been in contact with many people. reveal want to conversations. i have been in conversations heller and his chief of staff. that we are e sure actively working this. [inaudible]? >> i don't know. i'm not here to predict. you that it ell should pass. think that -- i really think

there were a lot of very moving stories that i'm sure a lot of here and around the country were responsible for. important they were because they didn't just go did.gh the numbers i they told the stories of real people and told stories of compelling stories. stories of -- they put the names and faces of people that clearly are people that are responsible, a d working, have fallen on tough situation for no fault of their own and are trying to get feet again.r that is who we're here to help. you open or is the white house open to further tapering he unemployment insurance progr program? you know, there is talk of phasing it reform, out. >> i think i put that in the , put forward, id which is we have an urgent 1.3 ation on our hands with

million americans finding their benefits cut off. bipartisan three months plan passed and that will a e us more time to have broader discussion and more in-depth conversation about how forward after that. can you talk, either you or jay, about what the president has personally been doing since back to get this passed, any calls with anybody and talk about what the event tomorrow is supposed to do vis-a-vis the vote that may or may not happen tonight? president has he been active and he has made calls. but again we -- we don't have after that say because we are doing what we can. sometimes that is more helpful with private

conversations. >> could this be avoided if the fought hard are on the ryan murray budget plan machiplan that was passed last month? i went back and looked at our efforts and i found that the president of the united states called for extending emergency unemployment seven times in 18 days. times in 18 days. we put out -- i think i called never 14.st on again on november 17 fp. a report air put out and the president did a weekly address. 14. -- a ed it in his weekly address entirely on this issue. he included it on his statement on the agreement on ryan murray. it was a significant part of his speech on inequality.

o i think the president and administration made very clear this portant we thought was to get done. we are not of the belief that to only way we should able work together is for somebody to threaten a shutdown. weekly address very, very clear that this ought to get done and ways for it to get done and the most clear and is for the united states senate it start by passing a bipartisan heller-reed legislation on the floor tonight. if you are afraid of a shutdown and you talk about you still would have had a couple of days to get a budget deal passed before the line.f that time >> the president called for it seven times in 18 days. called as, just as many of us were leaving, reed and heller forward. proposal

the president, from his vacation, called both senators and asked how he could help. the administration has been out there continually. we you may have noted that don't always have 100% control over the united states congress. the record is pretty clear that the president and his secretary of d labor have aggressively been ushing for this both in december, both in the break, and as quickly as possible as we returned. >> gene, thank you very much. >> thank you. is this the last time that we are going to hear from you in this role or this administration from this podium? is there any sort of thought that you want my to share? >> i don't know when jay is asking me back. i will probably be here for -- i january here for all of quite a lot of

february as well. jeff and i were talking yesterday and i'm quite when march comes i will be somewhere else. >> a lot of stories this weekend the 50th on anniversary of the war on poverty. you saw the clinton bush years on and and now the obama years. have policies, i think, been building a long time, poverty. the problem of but you were talking a moment ago about historic levels of long-term unemployment. in poverty.till how much responsibility does the -- bear after being in office five years for some of has policies to take hold? broader question i

think the war on poverty that lyndon johnson declared 50 years ago wednesday has made very important advances. there is no question. 19 1963, 51% of broader question i think the war on african-americ poverty and 25% had graduated from high school. i think one of the things that you heard us talk about and i hink that you will see our counsel of economic advisors bureau of more is the labor statistics has now started looking at a broader measure of to make sure we are looking at all the things that effect how people are doing the earned income tax credit, food stamps. when you look at that measure find that poverty poverty and , perhaps close to 40% 35% to 40% since then. important been progress. i think that it is important to understand that many of the over that have been done the last 20 years have mattered.

when i came in to in hen i was first here anyone 93 there were probably about 1.7 million americans that were above the poverty line because of the earned income tax credit. measures that have been condition over the ast 20 years -- because of measures that have been done the last 20 years including extending the earned income tax credit for or more th they children and there are six million people out of poverty. the refundable tax credit and child tax credit and i.t.c. it may be as many as nine million not being in poverty. when you look over this i think there u -- i think that is no question over the last 50 years things have been done we have learned some but i think we have learned lessons. both democrats and republicans you have to see what incentives

you are creating and policies better if they are designed to reward work. earned income tax credit has been so important is that it is an incentive for work. get that assistance as you are working that has positive positives and is given support for the program. an example, back to 1993, when you look at the thernative poverty measure, broader poverty measure, the overty rate was actually lower 2011, than it was in 1993. here, first time in office a year or two after a very mild ecession, poverty was higher than it was after the worse great n since the depression. so, we should be judging and different all the things that we are doing. we should be willing to reform.

but i think that there are this president has done have made big difference. it is estimated as many as eight not in poverty because of things done in the recovery act. the fact we have been in budget everybody is le focused on what is going to happen with the middle class tax relief the president has made a priority to fight for extending the earned income tax credit and part of the american opportunity tax credit, child tax credit, has shown his commitment, no politics in that, not even much attention, just in they aother thing is very smart professor, professor dubay just came out you a report that many of saw the last few days that said if we were to raise the minimum $10.10 the way it is that would lift 6.8

out of poverty and make them less dependent on government programs and would not add to the deficit one penny but it would reward work and reduce poverty. those are some of the things that you are going out of pover to hear from this president now and in the state of the union and those are we're going to fight to get done. somehowdy suggests that we want to fight for the minimum wage or extending emergency for political it being opposed to the right thing to do, i have a big solution. in's get them done right now a bipartisan way and everybody if i were to identify the sing liesingular most importantn to overcome it would be that. it is the reason why we're here today because of this, which i

read some where it is not a historical but it is also anti-historical because it denies tradition and puralty. hundreds of years of diversity and the idea to be my limit you have to follow the ethics from the seventh century and the short period of time. i think our journey as american-muslim has to be about refusing to being told by clerks who speak for us that islam in its ideals is a 7th century reality. we are americans of the 21st century. >> being muslim in america. part of book tv this weekend on c span 2. online for book club, we'll

discuss the amendments. go to book tv.org and click on book club to enter the chat room. on the next "washington journal" the president of the american's principle projects. followed by a federal investment in green technology companies with daniel weis. then a discussion about gains by al qaeda and affiliated groups in iraq and the united states agreement to assist without sending troops. seth jones is our guest. "washington journal" is live with your calls and the day's headlines every morning at 7:00 a.m. eastern on c span. a couple of live events to tell you about.

at 2:30 eastern, the sub committee on civil and human rights looks into the situation of refugees in syria. represents of the state and homeland security departments. now, a discussion on what has happen during the first days of coverage under the affordable care act. this is 40 minutes. host: welcome back.st our next guest is elise viebeck: she covers health care. guest: thank you for having me. host: walk us through how this has been going on for the congress has said. guest: sure. has obviously the botched rollout of healthcare.gov did not help anything, but people have been having mixed experiences.id n some are going to the doctorsle

office and they are fine, the fy are using their new coverage fy without issue, others are encountering problems when they call their insurance companies. i think it will take several months for all of this to shake out and for people to understand how their plans work, first and foremost. there are different providers within the system who can adjust. there is a lot of shake up right now and no one really expected it to go perfectly in the first few weeks. about the administration's response to those mixed results? first, they are saying to call the insurance companies. in fact, many new people who have voted in the obamacare plan , they may have gotten a packet in the last few weeks from their insurance company that contains a lot of information. health insurance is complicated, there are people who are having to go to these companies with

these providers to make sure they understand what is going on . the administration also set up a toll-free number to help people and theythose problems have caseworkers to help people with personal issues. tell us what you will be watching in january. guest: people do not need to have paid for their coverage to begin. manyll be watching that. opponents of the affordable care act believe that we should not be counting the 2.1 million people on private plans as currently enrolled, because not many of them have paid their first premiums yet. we will be looking at that. down the line we have the march 31 deadline that ends the initial enrollment. . that will be the deadline for the obama administration. we will be watching how many people enrolled in those private stabler medicaid, how

are those distressed pools going forward? we are talking about health care this morning from -- with elise viebeck, from "the hill." -- numbers this morning talk us through what you are hearing from members of congress, particularly from republicans, who are obviously very focused on this law. house gop is already planning another obamacare related vote this week. they will be bringing up the latest security concerns that somehow healthcare.gov requires the administration to notify anyone who has personal data that is compromised because of the healthcare.gov security issues. the administration has strongly rebutted any assumption or healthcare.gov

is making people's personal information vulnerable, but the republicans are going to try to draw attention to that this week and undercut the law as we start the election season. republicans are working to make this law their main issue in order to protect their seats in the senate. piece from "the hill," talking about aca insurance spiking right now. guest: it is interesting, people were not able to use these claims until january 1 at the earliest. people often do not use health insurance on day one. you may not need to go to the doctor. health-care care providers told us on the hill that they expect things to begin starting this week. obviously there is a holiday lag that has gone away. people are back to work, back in their normal lives, getting their needs met at the beginning of the year. call comes from

new jersey. henry is on the line for democrats. henry, are you with us? caller: yes, i am there. host: go ahead, you are on with elise viebeck, of "the hill." caller: good morning, how are you? yes, i am. host: turn on your television, we will be happy to chat with you. -- turn down your television, we will be happy to chat with you. caller: let me tell you how happy i am to be part of obamacare. my wife and i were both laid off from a job the downsizes. she did not have no insurance for a while. i did not have none. cobra costs weighed $800 apiece. on october 1 we signed up and kept on every day with every hour our calls. i did not have much problem, ok? i wish people would go into the

system and see how it works, ok? of how wellproof the obamacare works. we were praying a few days ago that we did not get more from the regarded insurance. she got the payment slip, we did not have the card yet. everything was in the computer. at the drugstore they picked up the medicine. it costs seven dollars for the medicine. my wife and i, we are very happy with the health care. i wish that everyone would look into it and give it a fair shake. the way these people are talking about it is not fair. thank you. henry certainly has a success story. he and his wife are the kind of people that the administration was hoping to help. it is possible that that family

is receiving a tax credit in order to make their coverage more affordable. in the state of new jersey we have seen a lot of people reporting positive experiences. it is important for viewers to remember that this law affects every american in a completely different way. theof the reasons that backlash has been so negative is ist any negative story, it presumed the administration is going to have to immediately fight back like it is an attack on the law. there are people like henry, who are having success. west virginia, george, democratic line. caller: thank for c-span, we can get the news and the truth out. i do not think that this young lady is telling the real truth obamacare. do you belong in obamacare? guest: in obamacare? do you belong to obamacare? guest: i have employer-based

health care. i know a lot about obamacare. do you have a question? get a: people cannot even telephone call in west virginia to get the ok to get the treatment in the hospital or from the doctor. not only that, you are not going to get the 7 million people needed to make this thing work, for one thing. and then the emergency room is quadruple already with people going to the emergency room, using this here what you call it because they cannot it into obamacare, you put them into the medicare what you call it. it has almost tripled the people going to the emergency room. where are you saving money? you date -- spending more money because of these people that did not want to buy insurance. you people are now giving it to them for practically nothing. that is why they are happy for it. i have always had good insurance that i have paid for out of my pocket. not only that, i am also a veteran.

as far as that goes. but this obamacare is going to self-destruct. the republicans do not have to do one thing to get rid of it, it will self-destruct itself, mark my words. within the next year. obviously, there have been many, many problems with obama care for people across the country. peoples experience tends to be based on who they receive insurance, and what state they live in. for people in the state of west virginia they would have many problems, which does not surprise anyone in washington. that number that the administration was hoping for by the end of march, do you have any idea how on pace they are? >> we know the 2.1 million people signed up for rival plans under obamacare under federal and state exchanges. certainly, that was a major expansion based on what we saw in october and november, two

very troubled months at the beginning of the enrollment. . i still think the administration has a lot of catching up to do to reach that benchmark. in fact, we know that, the white house has since pushed back and said that 7 million was not their goal, even though we know it was their goal in some places , but it does not mean that the law cannot survive with fewer enrollees, but it will be a major reach for them to get there by the end of march. host: fairfax, virginia, on the line for democrats. i just wanted to say, obviously, there are a lot of problems with obamacare. she is right about that. everyone knew that that would happen. health care is very complicated. unfortunately, the insurance companies are alternately still really in power, although there are some steps, like pre- existing conditions, things like need ist what we

single-payer. i am so tired of the republicans who, first of all, they do not even want to take a step away from the broken system that we had before. you know, they just want to keep things the same. we have to move in some direction. young son who, when he was under two years old, had what was called baby asthma. it was very common and it usually just kind of goes away, but after he was diagnosed with that the insurance company sent me a letter saying they would no longer cover anything having to do with his entire respiratory system from that point on. that is the kind of crap that has been going on out here. we have got to understand that the health of human beings should not be a basis for someone to make a profit on. for many> --guest:

progressive democrats, the law did not go far enough. that theseremember marketplaces are all about connecting uninsured americans with private health insurance. not government run, but heavily regulated and it still remains in the hands of private insurers. there are many families out there today who are thankful for the affordable care act a cousin banned discrimination based on pre-existing conditions. for his son it was something as minor as baby asthma, and for others it could have been acne, sleep apnea. many people think that those issue should not have been discriminated on and the affordable care act no longer allows that to happen. delays haveost: been announced for various portions of the law. do you expect more of that? guest: yes. perhaps before the end of march as the administration seeks to reach as many potential thellees as possible,

entire six-month enrollment. could be slightly delayed, that march 31 deadline could be pushed back. we will see larger adjustments to the law as well. insurance companies will be receiving -- receiving more money to shore up the risk pool, and it is possible that people may see relief under the individual mandate because of problems with healthcare.gov and people who would have otherwise qualified for medicaid expansion but lived in states that were not supported. host: how is healthcare.gov working now? guest: it is working better, in fact. they performed the tech surge, the white house called it. i remember being here at c-span to talk about it, i had gone on that morning and it was clearly not working well that morning and it turned into an enormous firestorm for the white house. now it has turned the corner. a former microsoft executive is now heading up healthcare.gov.

i think that the administration is very focused on making sure the website irks going forward, because it was such a disaster. port st. lucie, florida, frank is on the line for republicans. caller: how are you? guest: good. caller: i was wondering, this is a tax that people have to pay to stay in the country, now. it used to be that you did not have to buy insurance to stay in the country, but now this is a tax that you have to pay to stay in this country or you will get fined. you do not have to pay health insurance -- you do not have to have insurance, but now you are forced to buy in. and it is not affordable. not correct the problem, i think they should start with the hospitals, doctors, and insurance companies

to charge too much. thefor an aspirin to go to hospital? i went for a toothache and they said they could not help me, that they were not equipped. they charged me $4700 and said they could not help me. >> the caller brings up an important point. anyone participating in the american health care system knows about this, it is price inflation. hospital, thee inflation, it will cost more than what it would at the local drugstore. hospitals are seen as charging enormously huge prices between them. if you compare hospitals in your places, aith other procedure may cost more at one place compared to three miles down the road. there is certainly a lot of support within the public to get more transparency about these prices so that people can make choices that are better for them. often when we need our health care needs met, we are not thinking about the price and

many people wish that those prices were out there in the public. host: ohio, darlene is on the line for independents. caller: good morning, ladies. guest: hi. caller: a couple of questions. they are easy. are we headed for universal health care? thend of all, why was various state insurance departments not involved in the process prior to the affordable health care? my third question is -- do you know anything about ohio's magi? i may be saying that wrong, so i will spell it. m a g i. a possibility that our politicians could be regulating hospital billing practices and letting us know how much we are charged for various services? take you so much. some people believe that

obama care represents universal health care because, as the previous caller noted, everyone is now required to pay insurance or face fines. there are a variety of extremes in getting that coverage, you might get it through medicaid or private insurance tax credits. it depends on how you define universal health care, but certainly it is a law that help -- attempts to achieve that in several ways. second, state insurance departments are heavily involved in regulating the insurance. some of them are working heavily with the federal government to implement this law. others have not been as involved. the magi issue in ohio is not one i am particularly aware of the cousin i -- i cover the federal government, but i would encourage her to reach out in ohio, they should be able to answer her question. these billing practices are the ones i was talking about earlier

, desiring transparency, the obama administration has sought to increase that by covering reports from data on those prices. host: we are speaking to elise viebeck, from "the hill." let's go to our democratic line. years ago i three was involved in a car accident. i thought i was set with my health care through work. before that i injured in a car accident has been injured again. health care in 2012, we put out almost $20,000 in health care between the co-pay and paying the insurance direct. i put out somewhere, not sure exactly, between 17,000 and $18,000. on the limited income that we income.t was 67% of our

out of paid our savings the ira to supplement this year. not -- in the process of getting on obamacare. insurance has changed drastically, slow down, stop. this could happen to anybody. you could be hit head-on with a car. life changes in a fraction of a second. you do not know what is going to happen tomorrow. thank you for your time. any american, any person can run into an unexpected health crisis, as the caller said, which is why many people feel that health insurance is so important, it prevents the kind of medical threat, but even if you have health insurance you are sometimes overloaded with

terribly onerous out-of-pocket costs. you recently wrote a post called "top five obamacare stories to watch." guest: we are watching enrollment numbers very carefully. they are going to suggest how successful it is likely to be in the future. we know the 2.1 million people signed up for health insurance plans through healthcare.gov in december. obviously the administration wants that number to be much higher by the end of march. we will be watching that. but what we really want to know is the age of the people signing up for the health-care exchanges, which the administration has not said they will not publish the data, but they certainly have not put it out yet. this is a concept of insurance that if you have enough young people do not subsidize the cost ityour sick or patients,

will move altogether. if you do not have that, if it is only 60 people signing up, the administration could be in trouble, so we will be watching it. there are many strategies in the pools that are not in good shape. it is not that all is lost if it is older or sicker people enrolled, but we will be watching as it will be a problem for the white house of that is the case. host: scarborough, maine, republican line. caller: good morning. guest: hi. you suspect, now, that everyone going to the hospital and to the doctor has insurance? i know that in the past people would go to the emergency room because that was their only outlet. that was our most expensive place for them to go. now that everyone has health insurance, instead of the hospital billing out 69 dollars

for a band aid, it is now $.69. that may be the wrong number, but i think that got paid out to insurance companies who wound up paying to the hospital that amount of money. someone had that much money. all ofsuspect that now that is going to drop? and the immigrants that are not undocumented people, they are going to end up in the emergency room. who pays that bill? thank you. great questions for emergency rooms and health care for the uninsured. they are the most expensive venue by far, barring certain surgical operations, emergency room's are very expensive. the caller is right, they looked at uncompensated care for the uninsured, particularly low income americans in underserved billionses, there are

of dollars effectively donated to charity in the form of care for the uninsured. it is likely that health care prices in some areas could go down as a result, people having insurance, it could be better for everyone overall. it is an interesting question, going forward. host: baltimore, maryland, michael is on the independent line. caller: thank you for taking my call. i was just wondering, with the affordable care act, what about the new taxes that will be implemented along with it? who, primarily, will be affected? thank you. these are great questions. the affordable care act pays for itself with new taxes on health care industry. new taxes on providers. very few americans will be seeing these taxes, although

there are a few that will hit people. many people point out that the individual mandate to buy insurance or pay a fine, if it is upheld as a tax, but primarily the law pays for itself through a variety of taxes on the health-insurance industry, like medical device manufacturers. host: what is happening with the birth control mandate? from theuest: beginning that has been one of the most controversial portions, offering a range within health insurance plans. for celtic -- secular employer, that is not a big deal, many of them were already offering birth-control ranges. but for secular companies with religious owners, this has become highly controversial. there are certainly states that preach against this control, particularly the morning-after pill, which some people consider equal to abortion.

picking up the mandate in the coming years, recently sony a soda mayor issued an injunction for a group of catholic nuns in ,enver, which made major news as it had not been done before. even under the accommodation proposed by the white house, it was deemed that their religious liberty was still being infringed. wille is quite sure how it come down, but we are watching. host: from twitter this morning -- explain why it is so expensive. guest: so expensive? oh, boy. obviously provides a variety of tax credits to americans, expands medicaid, pays for major expansion of health care in the taxes onates through the insurance industry. it is one of the largest federal laws of its kind we have seen in decades. that may be why it is so expensive. host: independent line, raleigh,

north carolina. caller: yes. my question is -- the that itration has said is on the younger generation to sign up and pay for the healthier. if the healthier are allowed to stay on to their parents , itrance until they are 26 cuts them short, they will not be paying for it until after they get off their parents insurance. is the affordable care act supposed to be paid for? thank you. when you talk about younger, healthier people signing up for obamacare, we are not just talking about teenagers, we are talking about people in their late 20s, early , into their 20's on the affordable care act. many people out there, those are

the people the administration hopes to sign up for the new exchanges. gary is on the line for democrats. why is it, if you had a doctor, the wonder -- the one doing the service, and then you had the insurance company, the one handling the money and the paperwork, and the government involved, why do you need all of these people involved? especially the insurance companies. people went up three percent to five percent. plus, the irs is going to collect the money for the insurance companies and handle it. it seems to me like this is a fallback so that if the federal reserve bails, then they have another income on the people

that saves income tax. guest: interesting point. the affordable care act does regulate much of the industry. in washingtonted who know that at the result it would receive many more customers in exchange for the tax. the taxu mentioned breaks of the health-care website. you expect to see more guest: in the near future? guest:absolutely. the house gop will vote on a measure related to the security of the website requiring the administration to notify consumers it a to has been breached on the website, which has not happened yet that we know of. security of the website has been a major issue

for many in congress. darrell issa has been focused on it very closely. i think americans are concerned about the security of many retailers including health care. with breaches of snap tab and target in these different places, we can ask act to see more of these attacks which will turn more questions to the health-care website. what about those trying to defund it? guest: i think house republicans will be interested in keeping as much focus as possible on this. they feel this is an issue double-click the candidates to victory in 2014. certainly we can expect many more votes on the issue.

host: don and michigan on the line for republicans. caller: good morning. taxes, and i about own insurance agency in michigan. no taxes atre were the rates of the affordable care act. this is the biggest tax hike on the middle class in this country's history. with afamily of four silver plan, average age, about .118.84 per month just in taxes can you explain to the audience on how you said there is no care?for obama the caller is mistaken. there are taxes on individuals. primarily it is paid for are the

health insurance industry. certainly many people will see their out-of-pocket cost rise. others will see them fall. there is no way to argue there are no taxes in this law. host: cynthia on the line for democrats. .aller: hello i was calling to comment on another callers comment from west virginia. i have a 23-year-old son that ran into the hospital. he was able to get in. he actually signed up for the obamacare at the hospital, which he said was very nice. there were not any problems. a lot of what people say about obamacare has been factual because i experience it where there were not many problems. many people are having

positive experiences and signing up in their local communities at agencies,on the male public agencies and having a fine time. it kind of depends which state you live in. it sounds like this woman's son had a good experience. host: mark stone writes -- yes.: that is a very interesting question and very complicated for people's income who tends to vary. seasonal worker -- workers and part-time workers will find it difficult to navigate the issue of subsidies. the government will pay the full subsidy to the insurance company on your behalf if your current income makes you qualified for it. in the next tax year they will have to address and perhaps repay some of the subsidy. it will be very complicated and

an issue that will come up next year when the first filing season happens after obamacare is implemented. from align -- a caller ohio, and independent. diagnosed 18 months ago with: cancer. i am 55 years old and did not have insurance. by the end of last year i had racked up 300,000-$500,000 in medical bills. i have to have chemo every two weeks to stay alive. this new affordable care act has been a blessing to me and my family. i was wondering -- the caller may have answered this a long time ago, but nationwide health insurance seems like eventually it will have to go that way. it is so expensive to coverage -- coverage it on an individual basis. certainly something the progressive democrats are hoping for.

that we will move more towards a single-payer system. it seems like the american public is wary of this. after the affordable care act rollout the law remains very controversial. the majority purported they are still having bad experiences under the law. seems unlikely the public will tolerate a major overhaul of the health care system within years. move in that direction of the republican party not likely to let that happen. they are still intent on repealing that law. let's talk about cancellation notice -- notices. do you expect to see more of them? guest: it has created an enormous political fire for the white house over the past couple of months. many plants did not comply with regulations and had to be canceled.

that also means they did not qualify for grandfathered status under the law. this became an issue for republicans, citing that president obama promised several times for people to keep coverage if they liked it, and that turned out not to be true. theill see that echoed over next year. i think it is possible that employers will begin shifting some employees onto the new health-care exchanges over time. it is possible we will not see that movement for the next several years. there are cancellation notices in some people's future. many will say that is one reason we are happy that the marketplaces exist. host: jen on the line for republicans. caller: i am a word person. i have heard many people report that the pay will come from the

government. the health-care care industry will pay extra taxes. andcentral pay person is me you. it is taxpayers. reporter-span and your would do us a service if you spearheaded the idea that taxpayers pay all the bills. the government does not have any money come except what they take from us. you are leaving out the fact the health-care industry does not prime -- print money. feesonly take money for and services. the taxpayers are paying for the whole thing. no government agency, no industry except for they get it from us. i wish all the networks and reporters would tell the truth like it is. informedle who are ill

will think the government is taking, great. we are the government. remember that to individuals are taxed and that creates government revenue to do what they need to do but taxes on individuals are not the only type of taxes. industries are taxed, companies are taxed and that is major revenue streams. the caller is correct in some sense that people will see some higher taxes on the affordable care act, or at least higher prices but many come from higher taxes on companies. theaps people want to argue taxes are raising prices for consumers, which could be the case. is thencorrect to say it tax on individual people that is paying for the affordable care act. guest: another question on

twitter -- currently that is not a practice in american medicine. keep all are very upset about this. consumer -- consumers desire transparency when they use medical services. it is frankly in the service of the health-care industry and one way or another for them to keep that less public. the obama administration will move forward with a variety of initiatives that would allow the consumers to understand the pricing of the health-care. over the past year they published a report about the cost of hospitals using data mined from medicare. that shows based on the geographic area you could pay for times more or quite a bit less for the same medical service. perhaps congress will get in bald -- involved on that.

i am a retired nurse. i was formally elected to be president of the chicago nurses association and work day and -- worked 10 years for the visiting nurse association and a very familiar with the health-care problems of this country. thatieve it is imperative we have a reform so that more people have greater access to health care. if we look at the vital statistics in the health-care system, we are not the leaders of this world. that is unforgivable as we choose to use the technology for unrelated matters. behind president obama and michelle obama for their views about our health care needs in the health care system thato think the glitch

happened with obama's proposal was not entirely accidental come a republicans have shown themselves to be thinly disguised, greedy people. that is interesting. the caller raises the fact that health care outcomes in the united states are not as good as other countries. that is an important point. it is not discussed widely among the american public that in the united states your health care outcomes are not likely to be as good as they are in other countries, despite the fact that that we -- despite the fact that we pay more for our health care. that is something people want to see performed. host: howard in florida on the line for independents. caller: good morning. guest seems to be a great plan of the obamacare plan but it is simply a ponzi scheme that

will not last. 6 million plus policies have been canceled, approximately 20 million will. so far i have heard 500,000 have plan.ly paid for a that is a scheme that can last. obviously there will be a massive company bailout. the cure is worse than the problem. no amount of spin, lies, and deception will change that fact. it is only a matter of time before the whole thing crumbles. forget the spin. reality is a fraud. that is certainly a precise view of the affordable care act. for myself, i am a neutral

reporter, and that is why i am here talking about the facts. others are not benefiting as much. the is where i -- we see attention. that is why it remains unpopular in many part

>> good morning. i'm founding editor of health affairs. i will moderate a discussion this morning. i appreciate you all coming out on this day of warm weather before we all freeze tomorrow. it's a pleasure to have the staff of the office here to present. we'll have two presenters and then two others i'll introduce all four here in a minute. i'm prepared to help answer questions, respond to opinions, whatever it may be. i also point out in here is not

only the expanding paper, it's a cd that has the whole of the content of new issue of health affairs in it including the exhibits if anybody is in the exhibit. look for this to have everything you'll need in relation to at least the subject that we're talking about this morning and also the entire contents of the january issue. for about 25 years now, health affairs has been publishing every year the annual report of the office of the actuary that relates to national health expenditure trends. obviously, the latest report which you'll hear about and many of you have read in the terms of our paper, relates to 2012. over this time of this long stretch of time, at least we've been publishing the subject,

healthcare spending has averaged annually about 2.3 percentage points greater than the growth of the national economy in that particular year. while that percentage may sound modest, it's really largely the reason that healthcare expenditures have continued to gobble up more of the nation's economy every year. growing from about 5% in 1960 to 17.2% in 2012. we'll hear more about that from our presenter. today's story obviously is different. somewhat of a surprise you might say. i don't think there's any agreement either in the actuary

and other government circles. the reasons why obviously the recession played a part in it. the a.c.a. provisions probably played little or no part in it in terms of 2012. we'll hear more about that from the presenters. it's a great pleasure to introduce ann martin who will lead off. ann is an economist in the national health statistics group in the office of the actuary. she will be followed by michael hartman who is a statistician. he's a national health statistics group. two of the individuals here that will be available to answer question or help answer questions or respond to opinions, whatever. lekha whittle who is the economist in the office of the actuary. >> thank you very much.

is this how i operate this? ok. good morning, thank you all for coming today. my name is anne martin. i'm here today with other members of the national health expenditure accounts team to present to you the results of our national spending article for 2012. the trends that we will discuss today highlights some of the important points contained in our article which is to be published in the january edition of health affairs. just a couple reminders, the

information that we're presenting here today is embargoed until 4:00 p.m. at that time, the entire historical data series will be available on our website. i'll start off with main points of the 2012 report. national health expenditures increased 3.7% in 2012 compared to 3.6% in 2011. total health spending reached $2.8 trillion, where $8915 per person. health spending is a share of over all economic output as measured by gross domestic product fell from 17.3% share in 2011 to 17.2% share in 2012. i'd like to point out that in

july of 2013, there was a substantial upward revision of gross domestic product. this caused health spending share of gdp to be lower than it would have been had there not been a revision to gdp. this affected all years back to 1960. on this graph, what we're showing the annual rate of growth of national health expenditures compared to over all economic growth as measured by the gross domestic product. we're showing national health spend as a share of gross domestic product. there's three vertical bars and those indicate the last three recessions. what we can see in this illustration is that during the last three recessions, health spending growth was faster than that of gdp. at the same time, the health spending share of gdp increased.

because health spending growth is usually faster than over all economic growth during recessions, health spending takes up a larger part of the economy. however, soon after the end of each recession, gdp growth begins to pick up and growth in health spending starts to slow. we refer to this as lag impact of recession. from 2010 through 2012, this lag impact is illustrated as health spending share of gdp was relatively stable between 17.2 and 17.4%. i will now walk through some of our high level trends. they are relatively steal health spending growth rate from 3.7% in 2012 following growth of 3.6% in 2011. not due to one prominent trend. it was due to mixed trends within services and payers.

for personal healthcare spending which accounts for 85% of over all national health spending, growth accelerated in 2012 increasing 3.9% compared to 3.6% growth in 2011. however partially offsetting the faster growth in personal healthcare spending with slower growth in investment and health related equipment and net cost of private health insurance. this was accompanied by a decline in noncommercial research that was due to the expiration of funding from the american recovery and reinvestment act of 2009. we can attempt to explain how spending growth by examining components related to price and nonprice factors. prices increased at a slower rate and accounted for smaller proportion of health increase in 2012 compared to 2011.

nonprice factors refer to population growth, the age and gender mix of the population and all other factors such as the use and intensity services. this graph illustrates how we analyze the price and nonprice factors. the gold line is a representation of per capita spending growth from 2008 through 2012 for both aggregate national health expenditure and the sub component personal healthcare. the blue section of each graph represents the portion of per capita spending growth due to growth and medical prices which includes over all economy wide inflation and medical specific inflation. the red section represents the age and gender mix of the population.

the green section represents all other nonprice factors such as use and intensity. here we can see the effect of growth in each of these components relative to total growth. as i previously said, medical prices increased at a slower rate as compared to 2011. because health spending growth was relatively stable, prices accounted for a smaller proportion of per capita health spending growth. some specific reasons for this which are mentioned again later pertaining to services and payers, includes swelling of prescription drug prices because of wave of blockbuster patents at the end of 2011 and 2012 which led to lower prices for previously expensive drugs. there's a rate adjustment for medicare skilled nursing facilities which reduced payments for 2012. also, there were reduced payment updates for most medicare providers resulting from

productivity adjustment, mandated by the affordable care act. for healthcare services our main finding included faster growth in hospitals, and slower growth in prescription drug and nursing care facility spending. for healthcare payers be, we saw faster growth in medicaid and out of pocket spending. the specific reasons for these trends will be explained in slides to follow. regarding the affordable care act, all provisions that have become effective since enactment in 2010 are included in our health spending estimates because they are reflected in

our data that measure total revenues. while our historical data cannot parse out the spending that was directly the result of the a.c.a., the projections model show there was minimal impact from the affordable care act on aggregate national health expenditure trends from 2010 through 2012. within specific services and payers, we can identify some of the provisions that affected spending for those sectors. however, even within the specific sectors, the impacts were very small and in some sectors, the impacts were offsetting. for example, for private health insurance, programs that expanded coverage added to spending while the minimum medical loss ratio had a slight reducing effect. for medicare, a notable fact on spending was from reductions to

medicare payment updates or productivity adjustment particularly for hospitals. for prescription drugs the drug coverage discount program added to medicare spending while medicaid prescription drug rebates lowered medicaid spending. i'll start by walking through some of the trends by service. here are the services that we published in the national health expenditure account. the proportion of spending so we're showing distribution of $2.8 trillion. over all these shares tend to stay constant from year to year. 32% of all healthcare spending goes to hospital services. the second largest category is for physician and clinical services at 20%. the third single largest

category is for retail prescription drugs. in total these three services account for 61% of total national health spending. these were the gross rates between 2011 and 2012. for these services. as we can see, there were mixed trends that occurred in 2012. because hospitals and physicians and clinics and retail prescription drugs account for the largest shares of total spending, growth in factor tend to be the main drivers in healthcare growth. for spending for hospitals and physician and clinical services grew faster in 2012 compared to 2011. while spending for prescription drugs slowed. national health spending growth was also moderated by a slow

down in spending on investment and research and health related equipment. for hospitals in this graph, we're showing the growth rates from 2008 through 2012. hospitals spending increased 4.9% in 2012 following slower growth in 2010 and 2011. reached $882.3 billion. in addition, sending among the main payers of hospital services, medicare and medicaid all accelerated. for medicare, hospital spending growed at a faster rate. partially due to increase in medicare enrollment. some of this increase, however, was offset by the a.c.a. provision that reduced payment updates for hospitals. for medicaid, although growth in hospital spending was still low in 2012, its rate of growth was

still faster than in 2011. reflecting slightly better economic conditions as some states withdrew previous payment cuts and expanded care. here we're looking at spending growth for physician and clinical services. spending in this category increased by 4.6% in 2012 to reach $565 billion. also price growth slowed slightly in 2012, the use and intensity of physician services accelerated. when examining trends by payer we see that growth and out of pocket and private health insurance spending both accelerated in 2012. this increase growth was primarily due to increases in visits to doctor's offices as the economy continued to recover from the recent severe economic recession with consumer resuming spending on medical care that they may have postponed during the recession.

for retail prescription drugs, total spending reached $263.3 billion in 2012. as you can see over the last few years, spending growth has fluctuated. the rate of growth in 2012 was just 0.4%, which was the same rate of growth as in 2010. in 2010 the low growth was influenced by sharp slow down in use. in 2011 there was a temporary rebound and prescription drug spending grew by a faster rate of 2.5%. which is due to prices in brand names. in 2012 growth slowed again and this was driven largely up by a slow down in over all prices

paid for prescription drugs. first major influence on slower growth in prices was on the so called patent cliff or the wave of brand name patent expirations that occurred 2012 as numerous blockbuster drugs notably, lipitor and singular lost patents in 2011 and 2012. that led to lower cost generic versions of these drugs. also influencing the slower growth was continued increase in the generic dispensing ring. the dispense prescriptions that were generic excluding branded generic increased in one year. in large part due to many brands switching to generic status. among payers in 2012, we saw declines in out of pocket and private health insurance spending. this was influenced by the

continued movement by three and four tier coinsurance and copayment structures. coupled with blockbuster drugs now being available on a lower cost here. i'm going to turn the presentation over to micah who will discuss more about the payers of healthcare in 2012. >> thanks, anne. i will start my portion of the presentation with the payers of healthcare spending. we will take a look at the chart that shows distribution of healthcare spending and the $2.8 trillion that was spent in 2012.

we see health insurance accounted for 72% of all healthcare spending. within the health insurance category, we see that the single largest payer was private health insurance at 33% followed by medicare at 20% and medicaid at 15% on a rounded basis. outside of the health insurance category, we see that off to the left the next single largest category is out of pocket spending at 12%. it does not include any payments for private health insurance premiums. round out the remaining payers, other third party payers and programs, investment and government public health activities account for the remaining 16%. focusing on the annual growth rates for 2012 and 2011, we can see that national healthcare spending increased slightly from 3.6 to 3.7%.

among the four largest payers, we see there was faster growth in spending for out of pocket payments as well as spending for the medicaid program. however, there was faster growth was partially offset by slower growth in both private health insurance and in spending in the medicaid program. i'm going to go ahead and take a look at these major payer trends on the next few slides. starting with private health insurance, we see spending for premiums reached $917 billion increasing 3.2% which equal to average annual increase over 2008 and 2012 period. enrollment growth may be a major factor. enrollment did reach 188 million in 2012, crossed by 0.8 million individuals or 0.4%. however, enrollment levels were

still 9.4 million lower in 2012 than in 2007 at the start of the recent recession. also in 2012, net enrollment gains contributed to the slow growth in premiums. these plans have lower premium levels by higher cautionary amounts that other type of plans that reached 19% share of all covered workers and a 31% share of the population in 2012. taking a look at the net cost of health insurance which isn't pictured here which is the difference between premiums and benefits, it remains unchanged at $110 billion for 2012. however because spending for medical benefits grew faster than that, net cost ratio, are the shared premium attributed to nonmedical expenses dropped from 12.4% in 2011 to 12.0% in 2012.

focusing on the trends for private health insurance, premiums remained low for both years 2011 and 2012 and benefits accelerated slightly from 2.9% to 2.2%. the slightly faster growth was due to increased spending growth for both hospital care and for physician and clinical care. that was offset by a decline in retail prescription drug spending for 2012. focusing on the medicare program, we see that medicare expenditures reached $572.5 billion in 2012 and enrollment in the medicare program jumped considerably to 4.1% growth.

overall medicare spending growth slowed. the slight slow down in medicare was largely due a prom dent decline for spending in nursing home care which fell by 4.2% in 2011 following increase of 9.9% sore i2.2% was decline in 2012 following an increase of 9.9% in 2011. total medicare spending grew 0.7% in 2012 slower than the 2.5% rate of growth in 2011. now we can examine the medicare program in more detail splitting the program between fee for service and medicare advantage spending. we begin with fee for service expenditures which accounted for 73% of total medicare pending growth. slowed from 4.3% in 2011 to 2.7% in 2012.

the slower growth fee for service spending was due to several factors including decline in spending due to one time payment reduction to recalibrate payments in 2012 following a large increase in payments in 2011 corresponding to the introduction of the new payment system for these type of facilities. also contributing with slower growth due to increased use of lower cost generic drugs when blockbusters went off patent in 2011 and 2012. the a.c.a. reduced payment updates in 2012 for all part a and most part b providers. this was contributing to the slow down for fee for service spending. then taking a look at the medicare advantage program, we

see that spending increased 10.9% which is acceleration from the 7.0% in 2011. faster growth in the m.a. program was driven by 10% increase in enrollment. the 4.1% increase, over half the increase can be found if the medicare advantage program. medicare advantage spending growth slowed due to the increased enrollment from the baby boom population but also due to the implementation of the a.c.a.'s new payment mechanisms to linked to benchmark payment rates which effectively lowered the increase and total medicare advantage payments. in addition, the a.c.a. required plans quality ratings to factor into payments beginning in 2012. now looking at the medicaid program, spending for federal and state reached -- increasing 3.3% following growth of 2.4% in 2011. the pick up in the rate of growth was primarily driven by faster growth in hospital

spending as well as facer spending growth in other health residential and personal care. these two categories account for over half of all spending in the medicaid program for 2012. even with the faster medicaid spending growth, both 2011 and 2012 were still two of the lowest annual rates of growth in the history of the medicaid program excluding 2006 when part d was implemented and it changed the way medicaid paid for some beneficiary prescription drugs. the reason for the low level spending in growth in 2012 was mainly due to slower enrollment as the economy continue to recover and efforts by states to control costs following the expiration of enhanced payments by the federal government mandated by the american recovery and reinvestment act. on this slide, we illustrate spending for the medicaid program from 2008 to 2012 for both state, local and federal government.

the portion of medicaid spending financed by the federal government declined for the second year in a row, down 7.2% in 2011 and 4.2% in 2012. this was due to the expiration of these enhanced federal matching rates which were in effect in october of 2008 through june of 2011. these enhanced matching rates caused the share of rates to increase to approximately 67% in 2010. when program expired in 2011 this year fell and by 2012 the share returned. now switching gears, we're going to take a look at the sponsors of healthcare spending. we can see that the businesses households and government entities and other private revenues can be identified. the household healthcare

spending which includes out of pocket spending as well as premium payments made by employees and individuals among other things remain steady at 28% share for 2012. slightly faster household spending growth in 2012 occurred mostly from contributions to insurance premiums for both private health insurance and for the medicare program. slightly faster growth for medicare was due to -- the federal government share at 26% has declined due to substantial slow down in spending in 2010 and 2011 as well as the decline in 2012 and the decline in 2012 was due to the expiration of enhanced federal matching rates but also contributing was the expiration of early retirement and reinsurance program for 2012. we can see that state and local government share at 18% of total healthcare spending recently increased as growth and state local government spending was much faster in 2011 and 2012.

at this point, i want to wrap up our presentation by going over our main findings. we see that healthcare spending increased 3.7% in 2012 which was the fourth year of relatively low and stable growth. health spending reached $2.8 trillion, which was $8915 per person. after benchmark recessions has been made to the gdp, we see that the share of the economy devoted to healthcare spending

was 17.2% in 2011. over all spending was relatively stable due to mixed trends we mentioned. also for the medicaid program and for out of pocket payments. while spending growth slowed for retail prescription drugs, skilled nursing facilities and private health insurance and the medicare program. from a sponsor perspective, we see that the distribution of healthcare spending has remained relatively unchanged with the exception of the shift from the federal to the state local governments to mainly to the expiration of the ira and temporary enhanced funding. i want to thank you for your time and attention. i will turn the presentation back over to john. >> we'll take your questions if you could identify yourself and your organization, that would be helpful for the panelist.

>> jim, of the dallas morning news. wondering if some of the factors you described like one off events. like the declinement in investment and hospitals because of the end of the spending program end of patent protection for certain drugs. yet, we've had a few years now of slower growth. was 2012 a one off because of these specific factors and we should expect more next year? or was this part of a trend a

continuation of a trend that you've been seeing? >> i'll go ahead and start with that. the trends that we've seen in the last few years are consistent with historical relationship that we've seen between health spending and over all economic growth as anne mentioned when she showed the slide with gdp growth. as you mentioned, there were definitely some one time factors that impacted 2012. you listed a number of them that we covered in the presentation as well. what we can tell you is that the period of stability is consistent with the historical experience when the share of gdp tends to stabilize after an over all economic recession usually two to three years. that was shown on the slide where we had the health spending gdp trends and the share of gdp. the reason that happens is it takes several years for the recessionary effects to work their way through the health sector and through the health system.

what we're saying in the report is that the slow growth we've seen over the last few years is consistent with the historical trend and there were a number of one time factors that impacted 2012 including the patent cliff and the other factors you mentioned as well. >> the 39% increase in medicare enrollment is not a one off phenomenon. continuation of a trend that may increase based on your reading of demographics? >> that was primarily because of the baby boomers who started enrolling in medicare at the end of 2011. as far as the future, we can't answer that right now. we have medicare enrollment trends that the trustees publish and analyze. for us, we're just stopping at

2012 and that was the highest rate of growth in medicare beneficiaries in 39 years. >> but that population is not going away. >> yes. >> john. >> i wonder if you can put the slower than gdp growth in historical perspective and also share your thoughts on whether that might continue? >> i think aaron's statement about how this is the continuation of something that we have seen in the past. the cycle where health spending as a share of gdp tend to

stabilize after the end of a recession. that cycle has not been broken. we are continuing to see that. >> just in a historical context, john mentioned in his opening remarks difference between the average annual growth between gdp and health spending that health spending has grown faster. i don't know the exact numbers. i think over two percent faster over time. >> when was the last time there was a decline in gdp share? >> it declined by a very small percentage point between 2010 and 2011 but prior to that it was 1997. >> thank you. >> the report mentions a slower growth in investment health related equipment. do you have any data suggestive the demand and if not, do historical trend suggest that's going to spike back up?

>> we got our data from the bureau of the census. that was a deceleration that just came straight out of our data source. there was a big revision happened between last year's data and this year's data which sort of increased the growth rate for 2011 higher than what was previously reported. it was a revision. it increases last year's growth rate. we're seeing a return to normal in 2012 as far as in the future, we don't have the data for that yet. >> julie. >> julie from npr. i'm puzzled in your sponsored data in the share of household spending not going up. we keep hearing more and more about employers passing more costs on to their workers in terms of higher deductibles

those two things don't seem to be going together. is there something offsetting that? i'm puzzled by the idea that is staying constant when there's so much evidence that people are being asked to pay more out of pocket for their own spending. >> the household share has more than just the out of pocket payments. it also has consumers payments towards medicare part a. and part b premiums. households out of pocket only represents about 40% of that. out of pocket spending which is the coplacements and deductibles did accelerate slightly from 3.5% to 3.8% growth. it did have a slight up tick in 2012. the household, you might not be

able to see that because of the category contains more than out of pocket spending. but the private business side also still in effect from the end of the recession, there's more contributions to private health insurance plans as people are gaining their jobs. there's shifts within the sponsors as we come out of the recession that may or may not be visible to the distribution of spending that's occurring. >> i can walk you in the categories real quick. >> use the mic if you would. >> sorry. employee and self-employment contributions and voluntary payment, medicare hospital trust funds and premiums by individuals and all of these categories accelerated in 2012.

our data is picking up an acceleration, it's just in relative to the other categories within the sponsor that we're not seeing increase in the share. >> did you guys break out durable medical equipment as an expense or did it go down or up? >> it remains relatively stable. >> do you know what is the amount? >> it was about 5.6%. it's been that way for three years now. >> on page 74 it stays the prescription drug use was picked by the availability of lower cost generic drugs. is that three quarters of all expense prescription or three quarter of generic drug prescription cost $10 or less? >> all prescriptions dispensed. the data source on that is i.m.s. health. all dispense prescription, yes.

>> "washington post." you repeatedly say this is a historical trend that health spending tends to stabilize after a recession. you don't explain why this is the case. could you explain why this is the case? why health spending stabilizes? is it just for example inputs have lower price increases. second part of my question, would be even though prices account for rest of the over all increase in year, they seem to represent the largest share of the increase in spending. what is that increase and how does it compare with the past? >> the first part of the question in regards to what were the specific reasons why health spending has stabilized. it takes time for contract to work their way through the health system to be negotiated in advance.

in the past and we see it now, health spending is growing faster than gdp in times of recession. it takes time for contracts -- aaron, do you have any more on that? >> one of the reasons why we see gdp fall during the recession and then we have this lag impact where we don't see health spending come down, there's contracts in the healthcare sector that are negotiated more than a year in advance. there is also the availability of coverage through public programs so as people may lose their job, they may become eligible for medicaid. some individuals are able to keep private health insurance coverage through cobra and spouse's policy. there's also changes in consumer and employer behavior in response to changing economic circumstances.

employer decisions on which types of coverage made the generosity of coverage as well as individuals on which type of services to consumer. those types of decisions are not often immediately impacted during a recession. you see those changes in behavior occur several years after the recession. when you get -- you have the slow down or in the case of the past recession, the decline in gdp, several years after that as they start to converge, health spending growth rate, that's when you get the stabilization in the share of gdp that we've seen after the recession that we showed on the chart. >> the second portion your question dealt with prices and the portion that it makes of total health spending increase. for national health expenditures, what i showed on

the graph was that national growth per capita increased 3% in 2012 and in 2011, the per capita increase was 2.9%. >> my question is different. what portion of increase in health spending reflects price and how does that compare with the past? >> that was what we're showing for price growth is 1.7% out of 3%, which is a little more than half is attributable to price. in comparison to last year that was a drop. last year it was close to 80% prices made up of total national health spending growth per capita. we don't have national health expenditures broken out by price further back than 2004. in the recent past, this has been the lowest rate of growth

in prices. the recent past, this has been the lowest growth rate in prices. >> in the article on exhibit four visually you can see the nominal growth rate. this is a per capita chart but it shows the bars on that exhibit. it showed contributions of prices verse nonprice factors to nominal health spending growth. >> other questions? yes in the back please. >> the m.a. star rating demonstration, do you guys have a projection of what a.a. spending growth would have been had that demonstration not been in place?

demonstration m.a. plans for more lower quality scores than otherwise would have happened. >> no we don't. that's outside the scope of our project. we don't have those figures. >> are you able to quantify the impact the affordable care act on spending growth? you said it had a minimal effect. i was wondering if you're able to attach numbers to that >> over the course of three years, 2010 through 2012, it had an effect of less than .1 percentage over all level. total. less than .1 percent. positive. >> over the years, economist had

attributed technology development and diffusion as a major factor in the increase in spending. i don't know exactly how joe defined technology but is there any way to break that out and attribute some percentage to technology? the way we put the historic national health expenditure accounts together, we're not able to parse out the spenting growth in this project. specifically attributed to technology. we mentioned couple categories where we can look at trends and the equipment that's purchased bethe health sector and some of the technology that filters through that. we don't have a way to break that out. >> the category m.d.s and clinical services, what's the difference there?

what do you put in the clinical service bucket that isn't payments to physician? >> that's mainly emergency care centers and ambulatory centers. >> it slightly goes to physician owners and their involvement in investment? >> it could. >> thank you, i have a question about -- >> please identify yourself. >> jeff young with the huffington post i wanted to ask about the individual insurance market. to the extent to which premiums for exchange plans maybe higher than products currently on that market. do you expect to see a measurable effect on the rates of premium growth or the rates of car sharing among people with insurance over all in future