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CNN "State Of The Union" - Transcript


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KING: We begin this Sunday with someone who has firsthand experience of the contentious turn in the national debate over health care reform. Secretary of Health and Human Services Kathleen Sebelius has heard the heckling and the boos, and more importantly, the detailed questions Americans are asking at town halls organized by members of Congress home for their August break. Secretary Sebelius joins us from Michigan this morning to answer the administration's critics and the questions you might be asking around the kitchen table.

Thank you for joining with us, Madam Secretary. I would like to begin with something the president said at a town hall out in Colorado yesterday. Among the most contentious points of the debate and something the president once described as critical, is the so-called government or public option, to compete with private insurance companies. But if you listened to the president yesterday, he seemed to think, maybe it's not so important.


OBAMA: The public option, whether we have it or we don't have it, is not the entirety of health care reform. This is just one sliver of it. One aspect of it. And by the way, it's both the right and the left that have become so fixated on this that they forget everything else.


KING: Now, some, Madam Secretary, take that as a simple statement of fact, because you don't have the votes right now in the Senate for the public option. But some in this town in Washington, especially House Democrats, more liberal Democrats who have said that is critical. That they will not support health care without a public option. They take that as a message from the president that the votes aren't there, it's time to come up with a plan B.

SEBELIUS: Well, I think, John, that the president is absolutely right. This piece of the puzzle has had enormous focus and the president continues to believe that it's good to have consumer choice, let people choose an option in the new marketplace. And it's good to have competition for the private insurers who will inherit a lot of new customers and without competition, costs could skyrocket.

In a monopoly system, it's not a great way to hold down costs. So he continues to be very supportive of some options for consumers. What we don't know is exactly what the Senate Finance Committee is likely to come up. They've been more focused on a co-op, not-for- profit co- op as a competitor as opposed to a straight government-run program.

And I think what's important is choice and competition. And I'm convinced at the end of the day, the plan will have both of those. But that is not the essential element.

KING: So is the president trying to say to -- you know that the votes in the House and you know the support among liberals and they're angry. They think they're being sold out in the Senate. Is the president trying to say, I'm sorry, the votes aren't there, be prepared to embrace a co-op instead of a more robust public option?

SEBELIUS: Well, the way that the process works, the Senate will have a version, the HELP Committee has already come out in the Senate with a version that has a very robust public option. It's the same version that's in the House-passed bills. What we don't know is the final committee structure.

And I think the president is just continuing to say, let's not have this be the only focus of the conversation. Coverage for all Americans, lowering the crushing cost for everyone, making sure that we have new rules for insurance companies, that they can't dump people out of the marketplace if you get sick, that they can't drop your coverage based on a pre-existing condition, that you can't be priced out because you're a woman instead of a man, and gender discrimination won't be allowed to continue anymore.

Those are really essential parts of the program, along with choice and competition, which I think we'll have at the end of the day.

KING: So I want to get some of the president's travels this week, so I've moved over to our magic wall here in Washington. But let me just quite simply -- so the public option is not a deal-breaker from the president's standpoint? SEBELIUS: Well, I think there will be a competitor to private insurers. That's really the essential part, is you don't turn over the whole new marketplace to private insurance companies and trust them to do the right thing. We need some choices, we need some competition.

KING: You have been at some of these town halls, you know the volume has gone up. I want to walk through where the president has traveled in this past week as he makes his case. One town hall the president was at was up in Portsmouth, New Hampshire.

What makes New Hampshire so interesting is that 44 percent of its voters are registered as independents. And as you know, independent support for the president, specifically on health care, has dropped a bit in recent weeks. That was one stop up in New Hampshire.

He also then went from the East way out here up into Montana in the West. The president having another town hall out here. More casual, shirt sleeves out in the West. Interesting, in Montana, the president lost to John McCain, but just narrowly there.

And as you know, Madam Secretary, when you get further West, you have increased skepticism about Washington and about government spending and the role of government in health care.

And the president wrapped up his week with a town hall in Colorado out here in the conservative part of the state. This was a red state he turned blue in the election, but out in conservative Grand Junction, interesting in Colorado, 17 percent of the state's residents lack health insurance, 9 percent are on Medicare, and 8.5 percent on Medicaid.

As we watch the president travel, politically, many of his own allies, even some of his allies say, they are more and more skeptical he can get this bill this year. Do you share that skepticism?

SEBELIUS: I don't. I think that the debate across the country is -- reflects the fact that Americans care deeply about health care. It's the most personal issue to most folks. Everyone has a loved one, a family member, a child, a parent. They've gone through the system.

And I think there's a general recognition that the system we have in America is fundamentally broken. We spend more than any country on Earth. Our health results look like we're a developing nation. So we have to reform the system.

And I think what's going on right now is complicated, because we need to put the specific language together. But by and large, I find it encouraging that Congress is at the table working, that Congress is now traveling out to hear from their constituents.

We knew we were in trouble in Pennsylvania, John, when the woman who runs the Constitutional Law Center got up to welcome the crowd and she was booed. So, clearly, some of this anger is not directed to health reform. It's people who are, I think, uncertain and afraid about the future and, unfortunately, there has been a lot of misinformation intentionally circulated, trying to scare people, trying to scare...

KING: I want to get...

SEBELIUS: ... seniors and veterans.

KING: I'm sorry to interrupt. I want to get to some of those specific points and some of what you call misinformation coming up at the town hall.

But I want to ask you a question first as Governor Sebelius. You are Secretary Sebelius now, but not long ago you were the governor of this state right out here of Kansas. As you know, Democrats were saying, let's wait another month, let's see if they can come up with a bipartisan bill in the Senate, and if they can't by September 15th, then the Democrats are going to have to use their party line muscle and put a bill through the House and put a bill through the Senate.

Could Governor Sebelius sell that back home here in the red state of Kansas? Should we do something so big, so personal, and so expensive along a party line vote?

SEBELIUS: Well, I think the president is still hopeful and I am too, that we will have a bipartisan bill. I thought it was interesting that we had a Republican congressman from Louisiana yesterday come out and endorse the bill, saying that he intends to vote for health reform.

I think we'll have senators who still are working with the Finance Committee structure and they're likely to be part of the final solution. And there's no question, we have lots of Republican ideas, even in the House version, which at the committee level, did not have Republican votes. We have lots of Republican ideas.

So it's unfortunate that the Republican leadership in the House early on said, we don't want to participate in this, we're going to push away from the table. And certainly, that has been the push from the Senate Republican leadership.

But I hope at the end of the day that Republicans and Democrats join together. This is about America. This is about an American solution to our health system, which is an enormous part of our economy, but also make sure that we're going to be healthy and prosperous into the future.

We have to get this right to fix the economy. We have to make sure that all Americans have access to great health care, or we won't have a competitive country moving forward.

KING: Let's go through some of the specifics, some of the things that have come up at these town halls. And this e-mail I'm holding up here has been distributed by conservative critics of the president's plan to millions, millions of Americans across the country and we are finding people using it and reading off it at town halls. And I want to go through some of the line-by-line criticisms. One of the criticisms is this, they say, in the House legislation, on page 30 section 123 of the House bill, it says, there will be a government committee that decides what treatments and benefits you get. That true?

SEBELIUS: Well, I think that what Congress has done is to say that the bills themselves will not try to enumerate what the benefit package looks like. That will be left as it is in state employee health plans and in veterans' health plans and others to a group to say, here is the kind of basic benefit package.

And then ask for the companies to essentially put together the best possible package for Americans, knowing that that's a dynamic that changes from year to year. Some drugs are available now that weren't available five years ago.

We want to make sure that it's the best plan, the best options, and that the plans actually look different based on what companies decide to include as benefit packages.

KING: But how much -- let me jump in...

SEBELIUS: Congress won't...

KING: How much power would the government have in this dramatically changed marketplace? Because here specifically on that point, I read you the one-line bullet point from the e-mail. Here's specifically what that page of the bill says.

"There is established a private-public entity advisory committee that will be a panel of medical and other experts to be known as the Health Benefits Advisory Committee to recommend covered benefits and essential enhanced and premium plans."

KING: So the government would have a voice in what it says should be in those plans?

SEBELIUS: Absolutely, John. And that goes on every day. It's how the Medicare benefits get decided. It's how the Medicaid benefits get decided. It's really what happens in any private insurance company when they put together a benefit package along with an employer.

So it's exactly -- I was an insurance commissioner for eight years. It's exactly how health benefit plans are decided and defined around a broad set of parameters, saying, we want preventative care, we want to make sure we have primary care, we want to cover catastrophic care, we want the basic prescription benefits to be available to all Americans. And then the specifics are decided on an ongoing dynamic.

You don't want legislators trying to write specific statutes saying, this is in, this is out, knowing that it changes from year to year, day to day. We want a dynamic benefit system that benefits the American public.

KING: More of our conversation with Secretary Sebelius just ahead. More on the health care debate, also her thoughts on whether as parents get ready to send their children back to school, the country is ready for the return of the H1N1 virus. Stay with us.


KING: We're back talking with the secretary of health and human services, Kathleen Sebelius. Madam Secretary, before the break, you talked about the scare tactics. You don't like some of these issues being raised or criticisms being raised that you think are misleading or out of bounds. The president himself used the term, and I'm holding up "The Bozeman Daily Record" here -- the "Roswell Daily Record" I'm sorry -- he said on the death panel debate, simply dishonest things have been said in that debate, simply dishonest. I want to ask you, if we're going to have that standard and try to hold everybody to it in the health care debate, that what you say must be factual, how about this statement the president said earlier this week at Portsmouth, New Hampshire.


OBAMA: Under the reform we're proposing, if you like your doctor, you can keep your doctor. If you like your health care plan, you can keep your health care plan.


KING: Now, the president uses those exact same words in this essay published today in the New York Times. He can't say that, though, with great certainty, can he, that in a changed marketplace, my employer or any employer that provides me benefits might say it's cost-effective in this new marketplace to change things, maybe take the public option, maybe go look for another plan. And if there are changes, I might not get to keep my doctor, I might not get to keep my plan. Isn't that factually correct?

SEBELIUS: Well, what I think, John, what the president is saying that he wants to start with the employer-based insurance coverage that we've had in this country since the 1930s...


KING: Forgive me, forgive me, I'm sorry to interrupt you, but that's not what he's saying. He says if you like your doctor, you can keep your doctor. If you like your health care plan, you can keep your health care. That's very specific, what he's saying, and many have said that that's not exactly true.

SEBELIUS: (inaudible). Well, clearly, he can't prevent employers from dropping coverage, and it happens all the time, although health reform will stabilize that marketplace. That's what I was trying to get at. It provides tax incentives for small employers who now are dropping coverage year in and year out to get into the market. It provides help for lower-income employees to take their employer-based health coverage.

So I think at the end of the day, what he's saying is, you're going to have a stronger employer-based system, encourage more employers to stay where they are and encourage more doctors to actually participate in the system.

Clearly, he can't mandate that a doctor not retire or that an employer not switch a plan that might have a different network of doctors. But strengthening the existing platform that serves 180 million Americans well, making sure that employers have incentives to stay in and really putting up some firewalls so that we don't have employers dumping coverage, which we have day in and day out today. 12,000 Americans a day are losing their health coverage. And what the president is talking about doing with health reform is actually stabilizing that marketplace, not dismantling the marketplace.

KING: Another thing some critics of the administration have raised is what they say is a deal, an ambiguous deal, because they don't know the details with the pharmaceutical industry, that they have negotiated with the White House, the industry has, and that the White House has sort of told Congress what's in and out when you're pressuring the drug companies. So then those very same drug companies are spending $150 million or so on television ads supporting the president's plan. Some find this unseemly, because they don't know the details of what the White House has negotiated with the drug companies. Should those details be made public?

SEBELIUS: Well, I think there was a very public announcement, which I thought was incredibly good news, that occurred a couple of months ago, when the drug company manufacturers came to the table, met with the president, and after some negotiation with the Finance Committee and came out and said they felt that they could actually lower drug costs for primarily seniors in this country by $80 billion. Lowering costs. That's very good news. And seniors right now who have Medicare coverage that hit the so-called doughnut hole -- about four million Americans reach a point where they have no coverage any longer at all. They're paying 100 percent of their drug costs. They are using a lot of prescription drugs and really in a difficult state. Those costs would be cut in half. It would help stabilize Medicare. It will help lower drug costs for everyone, and that's incredibly good news.

And that was publicly announced, John. And I was in the meeting. I went to the pharmaceutical board following that, and had a lively discussion about other ways that we can continue to work with the pharmaceutical industry to make sure that Americans have access to lower cost, high-quality pharmaceuticals, and they're at the table. I think that's wonderful.

Usually, what happens in the Beltway is people fight to the death about issues like this. Certainly, the pharmaceutical industry was on the other side in the early '90s. I think it's great news for the American public that they're at the table and they realize they've got to help provide lower-cost prescription drugs for all Americans, and that will be part of this health reform package. KING: Madam Secretary, we're almost out of time, but I want to read you a line from the current issue of Time magazine as parents get ready to send their children back to school, and I want you to help us understand government preparations levels and when a vaccine will be ready and the effectiveness. Here's the line about the H1N1 virus. "One pessimistic model from the Centers for Disease Control and Prevention predicts that 40 percent of the nation could be struck, roughly 140 million people, with perhaps a six-figure death toll if a vaccination campaign is not successfully implemented."

Is that right?

SEBELIUS: Well, John, we're playing out a whole variety of scenarios. We're preparing for the worst and hoping for the best. We're still optimistic that we'll have a vaccine available about the 15th of October, but the regimen will take about five weeks. First shot, three weeks delay, second shot, and then about two weeks for full immunity. So we really need to work between now and Thanksgiving with lots of social mitigation, keeping kids home from school if they're sick.

I would urge every family to have a backup child care plan. If your child comes down with the flu, you need to keep him or her home. Who's going to take care of that child? Who's going to be at home? If a parent gets sick, what is the plan? Because we know the disease spreads quickly, and we will not have fully immunized even priority populations until about Thanksgiving.

But certainly, preparation is under way. We're looking at schools as great partners for possible vaccine programs beginning in the fall, to get kids immunized as quickly as possible, because this is a children's flu.

KING: Many challenges facing the secretary of health and human services, Kathleen Sebelius. Madam Secretary, thanks for your time today.

SEBELIUS: Thanks, John.

KING: Thank you. And next, more of your questions about health care. We'll separate fact from fiction with three members of Congress who also happen to be medical professionals. Stay with us.

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