Obama on the Record: News Conference on Healthcare Reform

Q Thank you, Mr. President. On Medicare, there are obviously millions of Americans who depend on Medicare, and when you talk about bending the long-term cost down, or when you talk about cuts in the current proposal on Capitol Hill, you talk about cuts in Medicare and they talk about cuts in Medicare, but there are never many specifics. Specifically, what kind of pain, what kind of sacrifice, are you calling on beneficiaries to make? And even if not right away, aren’t future beneficiaries going to be getting less generous benefits than today’s?


Q And a subsidiary question, what do you think about taking it out of the political realm and giving it to an outside body of experts to take the politics out of Medicare?

THE PRESIDENT: Well, on the second point, that’s exactly what our proposal is. It — called the MedPAC program. By the way, it was originally a Republican idea. I want to give credit where credit is due. The Republican Congress passed a bill that created a panel of health care experts to make recommendations to Congress on how we could get better quality, lower cost. The problem is every year it would just go on a shelf, and nobody would act on it.

So what we’ve said is let’s give that body some power. Let’s require Congress to vote on the proposals that they’re making every year. Congress can still reject them, so it’s not completely removing it from politics, but they have to reject or accept it as a package. And that I think would incentive and empower important changes.

But here’s the thing I want to emphasize, Chip. It’s not going to reduce Medicare benefits. What it’s going to do is to change how those benefits are delivered so that they’re more efficient.

Let me give you a very specific example. You’ve heard that as a consequence of our efforts at reform, the pharmaceutical industry has already said they’re willing to put $80 billion on the table. Now, why is that? Well, the reason is, is because there’s probably even more waste than $80 billion, in terms of how the drug plan in Medicare is administered. We might be able to get $100 billion out or more, but the pharmaceutical industry voluntarily said, here’s $80 billion.

You know what that means? That means that senior citizens who right now have a so-called doughnut hole in their plan where after spending a certain amount on prescription drugs suddenly they drop off a cliff and they’ve got to pocket the entire cost, suddenly half of that is filled. That’s a hard commitment that we already have.

So that’s a change in how we are delivering Medicare. But you know what, it turns out that it means out-of-pocket savings for seniors. That’s why AARP has endorsed this.

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