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Obama To Allow Canceled Insurance Plans Renewed For A Year; Health Insurance Plans; Interview with Steve Israel

Aired November 14, 2013 - 13:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

JONATHAN GRUBER, ECONOMIC PROFESSOR, MIT: They wanted to both fix the broken insurance markets and make sure that no one lost. You can't do that.

If you're fix a broken insurance market, some people who are benefitting from that broken market are going to have to pay more. The president had to deal with the issue and I thought he dealt with that issue in an effective way. What he -- in really a minimally disruptive year way by allowing one more year for people to keep their plans. It's also a good solution, I think, because it takes a bit of the pressure off the Web failure because it gives people a little more time to sign up.

JAKE TAPPER, CNN ANCHOR: Well, Jonathan, to be fair to members of Congress who have been objecting to this wrinkle in the law, President Obama did say repeatedly, if you like your plan, you can keep your plan, period. I guess he should not have made that promise or he should have been clearer about it, don't you think?

GRUBER: He absolutely should have been vaguer in his statement. But the job in -- of people in Congress, at least in my view, is not to worry about wordsmithing but to make the best possible policy. I think the Affordable Care Act struck the right balance of trying to minimize the disruption to people have insurance while moving to a system that's very popular. A nondiscriminatory insurance system is the number one thing Americans want to see out of this law. And I think people in Congress need to recognize that involves trade-offs that may be uncomfortable. But Congress -- people don't want to make the trade-offs.

TAPPER: One of the issues that I heard before President Obama made this announcement today is people in his administration, Obama administration officials said that allowing individuals to keep their policies even if they didn't meet the standards set by Obamacare would undermine Obamacare. Do you agree?

GRUBER: I believe that something like the Landrieu Bill or especially Upton Bill would have undermined Obamacare because they're open-ended so people can keep their plans forever. And what that would mean was -- would mean rate shock in 2015 and an ongoing problem of higher rates. The advantage of what the president proposes is that it's close-ended. It deals with the transition problem. It deals with the Web site problem people are having. But ends so that insurers can still, in 2015, have the certainty that they can set reasonable rates without worrying about healthy people staying out of the risk pool. TAPPER: And explain why in so many of these insurance companies are ending policies. Some of the policies obviously are junk policies but not all of them. The requirements for Obamacare set standards that not everybody -- for instance, a 65-year-old man who is under -- is covered with individual insurance would not have a plan with maternity care. Now he would. Can you explain to our viewers why that would be and why these plans that are not junk plans are not meeting these standards?

GRUBER: Sure. So, there's two issues you raise. One is what is the right standard? And that's a hard question. What the president decided and what Congress decided was insurers -- insurance should no longer discriminate by gender. What that means is that women should not pay more for insurance than men. That means, everyone's going to have to pay for maternity coverage, likewise, people who use prescriptions shouldn't have to pay more than people who don't. So, every insurance plan will cover prescription coverage, et cetera. That was a policy decision that was made by the president in Congress.

A separate issue is what about people who because of the existing discriminatory nature of the insurance market got very favorably priced products? People who had never sick so insurance companies gave them products at very steep discounts, recognizing that when those people got sick, they then eventually would pay higher prices and could get dropped. Those people are upset because they are going to pay more. But those people, I would hope would appreciate, would be the benefit of a world where if they do get sick tomorrow, they won't then get dropped or pay higher prices. And that's what they're getting out of Obamacare. But in the meantime they'll be paying higher prices.

TAPPER: And, Jonathan, you are also the architect of Romney care in Massachusetts. And I know you and I talked about this yesterday on my show, THE LEAD." We talked about the fact that there were very few enrollees initially with Romney care. Although, we also talked about the fact that people were not getting kicked off their policies at the rate that's going on on a national level with Obamacare.

Can you tell us about the Web site for Romney care? Did you have the same types of problems that the HealthCare.gov Web site is having with only 27,000 Americans able to enroll in a plan?

GRUBER: The Web site for Romney care was a lot easier. I mean, we -- it did -- it went more smoothly. It was a little rough in the beginning but it went more smoothly. But it was also a much easier lift because the key thing is we weren't doing a lot of the eligibility determination functions that are being done by the federal Web site. So, it's a bigger lift.

Look, my view is, as I said yesterday, I think given all of the Web site problems to actually have 100,000 people signed up, which is about 1.5 percent of their target, is actually pretty good compared to what we did in Massachusetts with even fewer Web site problems.

TAPPER: Although, they need 7 million people signed up by the spring. One other thing, President Obama today was saying that he did not think that this would happen with individuals being kicked off their plan. He knew that some plans wouldn't meet standard but he thought people would go on Obamacare and find better deals.

If you look at what was in the federal register, if you look at President Obama's own comments from that health care forum he had at Blairhouse in 2010, he very clearly knew that 7 in 9 million Americans were going to lose their coverage whether they liked it or not. Can you explain, as an architect of a similar plan and also as somebody who helped write the Affordable Care Act, what was supposed to happen with those 7 to 9 million Americans who were going to be kicked off their plan whether or not they liked it or not?

GRUBER: So, what was supposed to happen -- first of all, I think the number is more like 6 million. But the button line is that there are millions of people whose plans weren't -- wouldn't qualify. And the idea was that if they were low income, they'd be able to go into the exchange and get tax credits. And they will once the Web site's working and they can see that. The idea was the concern people would have at losing their plans would be offset by seeing beneficial tax credits they'd get.

Now, that wouldn't apply to everyone. Some people who had really substandard plans which, for example, didn't cover the hospital which is not real insurance, would have to buy up and they would pay more but the hope that they'd appreciate the extra coverage they were getting.

TAPPER: About how many of the 6 million or so Americans had what you would call substandard or junk plans? Is it the majority of the 6 million? Is it -- is it a small percentage?

GRUBER: You know, we don't really know. If I could guess, I'd say half. But the truth is we honestly don't really know.

TAPPER: And, Jonathan, are you surprised at the kerfuffle, at all of the controversy that has happened since the launch of Obamacare on October 1st?

GRUBER: You know, I'm not. I can't remember in my lifetime a law where once it was passed, the opposing party only ramped up their opposition to it rather than standing down and moving on to the next topic. You can contract it with Medicare Part D which was passed almost on a purely partisan basis. There was a few Democrats that voted for it. And yet, once it was passed, the Democrats sort of rolled over and said, despite the fact that a huge implementation problems, much like Obamacare does, they didn't try to repeal it. They weren't trying to go after it in this way.

So, I'm not surprised. It's really an unfortunate commentary in our political system that really -- fundamentally, Obamacare is a very bipartisan structure. Look, it was based on ideas proposed by the Heritage Foundation and initially endorsed by a Republican governor of Massachusetts. And Obama, to his credit, said, I'm going to take the Republican idea and adopt it. And suddenly, once he adopted it, it was terrible. And that's what's really frustrating.

TAPPER: I want to get a reaction to you from a statement put out by the insurance industry. And if we could put that full screen up. It said, changing the rules after health plans have already met the requirements of the law could destabilize the market and result in higher premiums for consumers. That's from the American's Health Insurance Plans organization, AHIP as we know. So, she says it could destabilize the market.

GRUBER: You know, the insurers have every right to be upset today. They were very good actors in this. They made a trade-off. They said, we will end the discriminatory practices which have basically been a lot of how we've made our money over the past 40 years, in return for everyone coming together in this fairly priced insurance market. All of the proposals in Congress would have fundamentally broken that contract in a major way. The president's proposal breaks that contract in a little bit of a way because it says, in 2014, some of those folks you thought would come into these markets now won't be coming in. And insurers have a right to be upset. I think that it speaks to the fundamental misunderstanding that led to this whole effort about the fact that somehow we can magically fix insurance markets but not create any losers.

TAPPER: All Right. Jonathan Gruber, Economic Professor at MIT, one of the architects of the Romney care law and somebody who helped form Obamacare. Thank you so much. We appreciate it.

We're going to take a very quick break. When we come back, more analysis, more information about the Affordable Care Act coming right up.

(COMMERCIAL BREAK)

TAPPER: Welcome back. President Obama's decision to, shall we say, tweak his signature health care law is generating a lot of reaction from even within his own party.

Joining me now from Capitol Hill, Congressman Steve Israel, Chairman of the Democratic Congressional Campaign Committee. Congressman, good to see you. You are a supporter of Obamacare but you've also said Obamacare could be improved. The president's decision today to delay insurance cancellations for a year, that is enough?

REP. STEVE ISRAEL (D), NEW YORK: It is an improvement. I had several dozen constituents on Long Island in New York, they were calling my office, who received these lack of coverage notices and they weren't interested in who was to blame. They wanted to know how it was going to be solved. Today, the president took a very important step in solving that problem. I can now tell constituents that there is a solution.

And secondly, look, where there need to be fixes and improvements of the Affordable Care Act, we ought to do it. I do not support repealing, defunding and reversing the Affordable Care Act. So, let's continue in the spirit of cooperation to make these improvements but let's not go back to a system where too many Americans were told that they were losing their coverage, that a preexisting condition was kicking off -- was kicking them off the coverage.

TAPPER: So, Congressman, House majority -- I'm sorry, House minority leader, Nancy Pelosi, she says that your caucus, House Democrats, are going to offer up your own fix tomorrow. What's in this fix?

ISRAEL: Well, we're going to -- about to go into a meeting to talk about the -- whether there is a need to continue to pursue legislative resolution to this. I think that the president had an important step and that he can do this administratively. If there is a need for us to do this legislatively, then I'm open to that. What's important is not the process, whether you do this administratively or whether you do this legislatively. What's important is the solution and that's what most Americans want us focused on.

TAPPER: There are individuals in your caucus like Congressman Doyle who have expressed real frustration, especially behind closed doors, with the difference between what the White House has been doing, their reaction when it comes to Obamacare, and complaints about the Web site, complaints about the -- shall we call it, a broken pledge of not being able to keep your health plan if you like your health plan. You are somebody, as the -- as the chair of the DCCC, the body in charge of electing Democrats to the House, you're somebody who hears from a lot of these Democrats who are worried about re-election, who are upset about what they're hearing from their constituents. With the understanding that you support the health care bill, what are some of the complaints that you're hearing that need to be fixed beyond what President Obama discussed today?

ISRAEL: Well, look, there are two major complaints that are self- evident, a Web site that has not worked and is not working and it must be fixed, and the notices that people received that their coverage was being terminated. Both of those fix -- both of those solutions need fixes and we need to focus on the fixes.

Going forward, however, people don't care about the politics of this stuff. And, quite honestly, they shouldn't be hung up on who to blame. What we should be focused on is, how do you get it fixed? How do you get it solved? And every poll that I have seen on the issue says the same thing, most Americans would prefer a member of Congress who vows to fix and improve the Affordable Care Act versus the member of Congress who is obsessed with repealing and defunding the Affordable Care Act. And so we need to be focused on those fixes, those improvements and those solutions and not get hung up on the partisanship and the politics of repealing and defunding the law.

TAPPER: Congressman, do you think as this bill was being sold to the American people that the White House and those pushing the bill were as forth right about some of the issues as they could have been? I'm specifically referring to, "if you like your health plan, you can keep your health plan," but also the fact that if you look at some of the trade-offs that are going to be made, generally speaking when it comes to the individual insurance market, women will pay less, men will pay more, older people will pay less, younger people will pay more, healthy people will pay more, and sick people will pay less. I don't know that that was fully conveyed to the American people. If you could go back in time, do you think there should have been more honest salesmanship?

ISRAEL: Well, there should have been certainly more precise education and more precise salesmanship, there's no question about that. But you can't go back in time. All you can do is move forward. And since going back in time is physically impossible, we should focus on what is in our control. What is in our control is continuing to make improvements and fixes to this law and not allow a small group of Republicans, or a large group of Republicans in the House of Representatives, to continue to ambush and sabotage this law.

What counts is where we end up. And here's where we need to end up, with a law that provides less expensive coverage for most Americans and a law that provides consumer protections. Most of the case work that I got, Jake, in my office on health care issues in New York was from constituents who were diagnoses with breast cancer or other preexisting conditions who were told by their insurance companies, you lose -- literally, you lose your policy. I do not want to go back to that system.

TAPPER: No, I hear what you're saying, but in order for people with preexisting conditions to automatically be able to get insurance, other people need to pay more to pay for that. And I don't know that that was fully and adequately conveyed to the American people.

ISRAEL: And what we have to do is continue to try and make fixes where we can and make those improvements, which is a far better alternative than repealing and junking the entire law, and going back to the system where Americans had health insurance companies controlling their health care and where fundamental health decisions were made based not on, how do we get you healthy, but how do we enlarge our profits as an insurance company. I do not want to go back to that.

Can this law continue to be improved? Yes, I'm all in on that and we'll work with Republicans and Democrats to accomplish that goal. But use -- continuing to ambush and sabotage it, continue to be obsessed with repealing and defunding it is not a good option for the American people.

TAPPER: Congressman Steve Israel, chairman of the Democratic Congressional Campaign Committee, Democrat from New York, thank you so much for your time. We appreciate it.

ISRAEL: Thank you, Jake.

TAPPER: Dana Bash joins me now from Capitol Hill.

Dana, I understand you have some news about Mary Landrieu's legislation. That's the Democratic senator from Louisiana who had a bill to delay -- or actually to allow Americans to keep their health plan if they like their health plan. What's going on? What's the news?

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: The news, Jake, is that she is not letting up on it at all. She, though an aide, says that she is going to continue to push for her legislation. She put out a statement applauding what the president said, but saying that what she has been pushing, she will continue to do for several reasons. One, substantively, she - and, by the way, she's not alone. She has other Democratic senators, some of whom are also up for re-election next year, like Landrieu is, saying that they believe that this shouldn't just be a one-year fix, which is what the president is proposing to do administratively, that they - that this should be permanent, that if you like your health plan and it was canceled, you should be able to reinstate that, not just for a year, but for a very long time. And secondly, this would be mandatory. It wouldn't just be the president encouraging insurance companies to do it, as he has.

Now, what does this mean? Politically, going forward, it means that certainly this is a big plus for Democrats here on Capitol Hill with the president admitted he has really hurt and maybe thrown under the bus politically in the next election year because of all the problems with Obamacare, but they realize - when I say they, those in the Democratic caucuses in the Senate and the House, that the president isn't somebody that they can rely on, that they need to be out there and be active participants -- that's a quote from a Democratic leadership aide - active participants in finding a solution. So that's why you're not going to see letting up by Democrats who want to have a legislative fix as well. It's also why Nancy Pelosi, the Democratic leader in the House, says that they are going to have an alternative to give Democrats to vote on tomorrow when this issue comes before the House.

TAPPER: All right, Dana Bash, thank you so much.

Coming up, our chief medical correspondent Dr. Sanjay Gupta joins us to talk about where he sees the impact of this new fix, coming right up. Stay with us.

(COMMERCIAL BREAK)

TAPPER: Welcome back.

Chief medical correspondent Dr. Sanjay Gupta joins us now on the phone from London.

Sanjay, thanks for being with us.

You are familiar with the insurance industry as a doctor, as well as a journalist. How do you think the insurance industry and the insurance companies are going to react to this news from President Obama that individuals who have been kicked off their plan, because the plans don't meet the requirements of Obamacare, can stay on their plans for an additional year?

SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT (via telephone): Well, you know, I think it's tough to paint the entire insurance industry with one broad brush. I mean there certainly -- it's a bit disruptive and people already start thinking about whether it's going to have an impact on premiums, you know, cost for insurers, people that are buying these policies next year. But, you know, when you talk to these folks - and I've been reporting on this for a long time, Jake, it's more of a long game here. You know you -- the whole concept of something known as adverse selection, which you've been talking about on your program, this idea that if your adversely selecting, you have people who are just costing more money, that's not going to work and people have been describing it as this house of cards.

It's not really that simple. It -- while this will be disruptive, in the longer run, as more and more people come into the system, under this individual mandate, which is really the more important pillar in this whole thing, it's likely to be able to sustain itself. So they seem - you know, I've been talking to people -- even during the speech I was communicating with people in the insurance industry. Obviously this is a big deal. I don't want to underestimate that. But they were relatively non-pluffed by this and, you know, I think that they - they recognize that it's a much longer proposition.

TAPPER: Of course the health insurance industry trade association here in Washington, D.C., said this fix would be disruptive. Where do you see the biggest impact of this fix being offered today by President Obama?

GUPTA: Well, I think - I think a lot of people are going to keep their insurance, obviously. That's what's going to be the most immediate impact. And again, you know, this hasn't been explained really well, as the president said so many times today, but this idea that there are -- as a doctor I can tell you, I -- you know, when I'm scheduling procedures for patients or talking to them about the different things they're going to need, you spend a lot of time on the phone with insurance companies to get some of those things done and I think a lot of doctors are looking forward to this idea that much more of that would be streamlined, much more of it would be covered, many more patients overall would have health care insurance, so it would address a lot of those things. And that's -- for a year, that's not going to happen to, you know, who knows how many patients. They're going to keep those older plans.

There's something else, though, Jake, and I think it's something that people don't talk about enough. It's this idea that, you know, we wanted to create a health care system that focused on certain things to try and make us a healthier America overall. And one of those things was prevention. This idea that preventative services would automatically be covered in totality, covered for the procedures, covered for the co-pays, deductibles, all that sort of stuff would be covered. And that gets us closer to this place where we're actually becoming a healthier America.

A lot of these plans, that again will now be allowed, extended for a year, don't offer those services and patients who should be getting those services don't get them. They don't recognize that that's a problem because they feel healthy. But in the long run, they may have caught a cancer that otherwise would not be caught. They may catch heart disease earlier than otherwise would have been caught. And from a medical perspective, that's a big deal again for the long game.

BERMAN: All right, Dr. Sanjay Gupta on the phone with us from London. Thank you, Sanjay.

Let's bring in our chief national correspondent John King and chief political correspondent Candy Crowley.

Listen with me to President Obama taking responsibility for this just a few minutes ago.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Already people who have plans that predate the Affordable Care Act can keep those plans if they haven't changed. That was already in the law. That's what's called a grandfather clause that was included in the law.

Today, we're going to extent that principle both to people whose plans have changed since the law took effect and to people who bought plans since the law took effect. So state insurance commissioners still have the power to decide what plans can and can't be sold in their states. But the bottom line is, insurers can extend current plans that would otherwise be canceled into 2014 and Americans whose plans have been canceled can choose to reenroll in the same kind of plan. My expectation was that for 98 percent of the American people, either it genuinely wouldn't change at all or they'd be pleasantly surprised with the options in the market place, and that the grandfather clause would cover the rest. That proved not to be the case. And that's on me.

(END VIDEO CLIP)

TAPPER: That's on me, John King.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: That's on me. He also said that he acknowledged that, yes, Democrats are taking a hit because of the problems with the rollout of the health care law and he said he wanted to try to help them. He said he would, you know, that the voters should blame him, not those Democrats. You've already heard from Capitol Hill, Democrats who want to take votes now, Jake, because they're in tough re-election battles back home. They'll applaud what the president's doing, but they want to take votes so they can go back home and say, look what I did. It was on Bill and Hillary Clinton in 1994, the Democrats lost 52 seats. A lot of Democrats are worried that after the government shutdown they were optimistic, after the rollout of Obamacare they're getting very pessimistic about what next year looks like.

CANDY CROWLEY, CNN CHIEF POLITICAL CORRESPONDENT: Yes, administrative fixes don't work on the campaign trail. On the campaign trail you have to say, I voted for this and -- yes, I voted for the president's health care plan, but I also voted to change this, this, this. You can't go sell an administrative fix.