Accuracy in Media

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(Transcription by J. C. Hendershot)

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Interview with Sally Pipes by Roger Aronoff

The “Take AIM” show on BlogTalkRadio, September 16, 2010

ROGER ARONOFF: Our guest today is Sally Pipes—President and CEO of the Pacific Research Insitute, a San Francisco-based think tank—and the author of the book The Truth About ObamaCare.  Good morning, Sally.  We’re happy to have you here on Take AIM!

SALLY PIPES: Good morning, Roger!  It’s a pleasure to be on the show.

ARONOFF: Great.  Before we discuss your most recent book, The Truth About ObamaCare, I want to tell our listeners a little more about your background.  Ms. Pipes has been President of the Pacific Research Institute since 1991.  The Institute promotes free market solutions to issues such as the environment, education, and health care.  A former Canadian, Ms. Pipes is a frequent guest on network and cable news shows, from The Today Show to Kudlow and Company to Lou Dobbs and The O’Reilly Factor.  She writes regularly for Investor’s Business Daily and The Examiner newspapers, and has written for The New York Times, The Washington Post, and The Wall Street Journal.  She is a renowned expert on health care and economic issues.  In 2005, she was named one of the “Top Ten Women in the Conservative Movement in America,” as published by Human Events.  She has written three books, including The Top Ten Myths of American Health Care: A Citizen’s Guide in 2008, and her newest book, out last month from Regnery, The Truth About ObamaCare.  I’m pleased to welcome Sally Pipes to Take AIM!  So tell us how the subject of health care became such a passion for you that you have now written three books on it.

PIPES: Well, as you mentioned, I came to the United States from Canada in 1991, and so I grew up in Canada, under a government-run, single-payer, Medicare-for-all health care system.  And, you know, by the late ’80s, we were seeing that waiting lists were developing for people having to wait for care, care was being rationed, and there was a lack of access to the latest new treatments and technology.  So, at the Fraser Institute, in the late ’80s, we started a research project called “Waiting Your Turn,” a guide to hospital waiting lists in Canada.  It became evident to me that the government in Canada had to set a global budget on what they were going to spend on health care—10.4 percent—so, as a result, you have these long waiting lists.  The average wait today, in Canada, is 16.1 weeks, from seeing a primary care physician to getting treatment by a specialist.  Four months!  So when I had the opportunity to come to the United States, I took advantage of it.  Of course, I thought, I was going to get away from that Canadian single-payer health care system.  I began writing about it when HillaryCare was out there, when California had a single-payer initiative—debating, speaking, all of this.  I’m passionate about repeal and replace of ObamaCare, the “Affordable Care Act,” because, I believe, it’s taking us down the path to a single-payer, Medicare-for-all system.  That is what the President wants; what Nancy Pelosi, our Speaker, wants; and, I think, what Senate Majority Leader Harry Reid wants.

ARONOFF: Speaking of Nancy Pelosi, she famously told us that they would have to pass the bill before people could find out what was actually in it.  What would you say is the biggest surprise to people about that legislation?

PIPES: When she made that statement—I’d been writing a lot about ObamaCare for over a year—when she made that statement, I said, “I have to write a book: the truth about ObamaCare,” and I was delighted when Regnery came and asked me to write this book.  Just a couple of weeks ago, at a town hall meeting in Montana, Senate Finance Chair Max Baucus said, “I can’t waste my time reading the Affordable Care Act.”  So I’ve written a 240-page book which is written in a style that the man on the street can understand.  But I think the two biggest things about ObamaCare are, one—his two goals were to achieve universal coverage, and to bend the cost curve down.  Well, we’re not going to achieve universal coverage.  23 million Americans will still be uninsured in 2019.  The cost curve is not going to bend down.  He originally wanted a bill that would cost $900 billion dollars over ten years.  The CBO says this will be $940 billion over ten years, but I believe most of the tax increases and things do not come into effect until 2014.  So between 2014 and 2024, I believe, and many other economists as well, that this legislation, if not repealed and replaced, is going to cost the American taxpayers about $2.5 trillion dollars.  So we won’t have universal coverage, and the cost curve is not going to go down, it’s going to go up.  These are going to be two of the things that are going to lead us to this single-payer government that’ll run our health care system.

ARONOFF: Weren’t we told that in the second decade, this would actually reduce our national debt by a trillion dollars over that period?

PIPES: Well, we’ve been told a lot of things.  If you think back, when Medicare and Medicare came into being in 1965, Medicare cost $3 billion dollars in the first year, and the precursor to the Congressional Budget Office predicted it would cost $12 billion dollars by 1990.  Well, in fact, it cost $110 billion dollars.  So you can’t rely on statistics that come out of government because they just don’t know what the increased demand for health care will be.  No government program ever cost what people think it will cost.

ARONOFF: You just said, and you write in the book, that there were, supposedly, 34 million people without health insurance, and that there will still be 23 million people, I believe you said, by 2019.  What is the plan for those 23 million people?  Do you believe that figure is accurate?

PIPES: The new uninsured numbers just came out this morning, from the Census Bureau, saying there were 50.6 million people who are uninsured today.  Just because you don’t have health insurance doesn’t mean you don’t get health care.  We have a federal law called EMTALA, which means that anyone who turns up at an emergency room will have care.  When you break down that number—I haven’t actually broken down the 50.6 million yet, but with the 46.3 million uninsured in 2009, 14 million of them were people who were eligible for Medicaid, the program for low income Americans, and S-CHIP.  There were only about 10 million who were chronically ill, or had a chronic condition, who were uninsured for two years or more.  Those are the people we should be taking care of, not throwing out the finest health care system in the world.  Of the uninsured, the President said we would be adding 30 million to the rolls of the insured, and 18 million of them will be eligible and will be put on Medicaid, the program for low income Americans.  Well, I find it very interesting that 14 million are eligible for Medicaid, today, and haven’t signed up.  I believe it’s because lower income people, who don’t have insurance, would love to turn up at an emergency room—because, if you have Medicaid, it’s becoming increasingly difficult to find a doctor, because doctors don’t want to take these patients because the reimbursement rates are so low.  This is only going to get worse, and it’s also going to have a major impact on our seniors, because this legislation is going to cut Medicare by $529 billion dollars over ten years.  So as Richard Foster, Chief Actuary at Centers for Medicare and Medicaid Services, has said, seniors are going to have the trouble getting access to health care, and, also, they will have a very hard time finding a doctor, and one in three new Medicare-eligible people today is already having a difficult time finding a doctor.

ARONOFF: I want to come back to that Medicare issue, but that figure you said, of 50.6 million, now, believed to be uninsured—as I recall, that was the figure that the Obama administration was using early on, until people pointed out that somewhere like 15 million of those were illegal aliens, so, to try to make the point that they weren’t planning on covering them, they just, one day, dropped the figure and said there was 34 million uninsured.  Now they’re back to 50.  Do you think that represents putting those people back in the figures?  I know you said you haven’t done an analysis of it yet, but is that what you think is going on here?

PIPES: As I say, the new number is 50.6 million.  The Census Bureau has said that of that number, 13 million are noncitizens, both legal and illegal.  So there are, probably, out of that 13 million, there are probably about, I would say, eight or nine million who are illegal immigrants.  Obama has said that they will not be covered under ObamaCare.  But illegal “citizens” can turn up at emergency rooms, and they do get care.  The second thing is, we’re not sure how this is all going to unfold with the new legislation—and it may be that, within the state-run exchanges, which become effective in 2014, some states may allow illegal immigrants to get insurance in the exchanges.  It’s going to be very, very interesting.  But the point is, we have, probably, eight to nine million illegal immigrants who are part of that 50.6 million who are uninsured.  But, as I said before, it doesn’t mean they don’t have health coverage.  A lot of people—particularly the young invincibles—they pay for their health care as they need it.  They think nothing is going to happen to them.  Why should they spend four to five hundred dollars a month on health insurance when, probably, nothing will happen to them?  But $30 billion dollars is spent, out of pocket, by Americans paying for their own health care, and not having insurance.

ARONOFF: One of the things that I believe most people didn’t realize is that this bill creates or expands more than 150 agencies, each with its own set of regulations. As you just said, we don’t quite know how this is going to unfold because, actually, a lot of it hasn’t been written yet—or is being written.  So the law, when it comes down to it, is being written by bureaucrats working under political appointees, rather than elected representatives.  What are the implications of that?  This isn’t going through a legislative process, and much of what’s going to go into effect is just being written that way . . .

PIPES: You’re exactly right.  159 new boards and commissions are going to be established under ObamaCare—plus 16,000 new IRS agents are going to be hired to monitor our tax returns to see whether we have health insurance, or if we’re going to pay a fine, by 2016, of $695 dollars.  But a more important point is, during the health care debate, in February, before it was actually passed on March 23rd, the President wanted to have—he was very much in favor of the “public option.”  There isn’t a public option in the final bill.  Also, he wanted to have a health insurance rate exchange.  Remember: He originally talked about “health care reform,” but he ultimately moved to talking about “health insurance reform.”  He wanted this health insurance rate exchange, which also didn’t make it into the final [unintelligible].

But a couple of months ago—as you mentioned, the Secretary of HHS, Kathleen Sebelius, has tremendous control over a lot of the decisions under ObamaCare, and just last Thursday Kathleen Sebelius spoke at the American Health Insurance Plans meeting, and she said she has a list, and any insurance companies that have increased premiums by a rate that they think is “unreasonable”—they are going to ban insurance companies from participating in these new state-run exchanges.  Doesn’t this sound very mafioso-like?  Sebelius has a list?  She’s going to make a decision about what insurance companies can be in the exchanges?  It’s really about bringing about price control on our health care system.  This is just another step—as I mentioned, there’s no public option, but Lynn Woolsey, a Democratic Congresswoman from the Bay Area, she’s already introduced an amendment that would include the public option.  It was in the original House bill, not the Senate bill.  Henry Waxman, Chairman of the Energy and Commerce Committee, has said that if insurance rate increases are too high, “we’ve got to bring the public option back”—that is, the government-run insurance plan which would compete against private insurers and, I think, that will be the death-knell, crowding out private insurers and leaving us all in a government-run health care system.

ARONOFF: You also point out that the law imposes huge new taxes in 2011, but the major benefits don’t kick in until 2014.  Is that conveniently timed to be after what he hopes is his reelection—Obama?  Is that what’s going on there?

PIPES: I think there are two things.  A number of regulations on insurance companies come into effect on September 23rd, which is next week.  That includes reducing, and finally eliminating in 2014, annual limits or lifetime caps on an insurance company plan.  It includes allowing young adults to stay on their parents’ health insurance until they’re age 26.  It includes no co-pays or no co-deductibles for preventative care, including an annual physical, mammogram, colonoscopy, diabetes testing.  All of these things are going to add significantly to the cost of insurance, and insurance companies are going to have to increase premiums.  So Obama has done a great job of saying “I’m offering you, the American people, all these wonderful things.”

Starting in 2011, there will be new excise taxes on insurance companies, medical device companies, and pharmaceutical companies, all of which, I think, are going to destroy research and development and innovation in these areas—which, really, America is where innovation takes place, and where people come from all over the world in order to take advantage of the finest care.  Starting in 2012, there are going to be some new Medicare tax increases.  One will be a .9 percent increase in the Medicare payroll tax, to bring it up to 2.35 percent on individuals earning $200,000 a year or more, families earning $250,000 or more.  Remember, President Obama, during the campaign, said, “Anyone earning under $250,000 will never face a tax increase.”  Well, that’s a lie.  The second point is, also in 2012, there’s going to be a new tax on unearned income, which will include interest dividends, the sale of your property, of 3.8 percent—and that also applies to individuals earning $200,000 a year or more, and families of $250,000.  So we’re seeing those tax increases.  And then, I believe, in 2014, there will be a lot more tax increases, because this program is going to be, as I said, costing about $2.5 trillion dollars over ten years.  The American people are going to be very upset with higher taxes, higher deficits, and, ultimately, rationed care.  Because that’s what’s going to happen under ObamaCare, as we move down the path to government-run Medicare-for-all.

ARONOFF: Just this week, there was an effort in the Senate to repeal parts of the law.  It didn’t get much attention in the media, but it had to do the 1099s, and the Obama administration was opposed to this effort that was going on.  Tell us a little about that.  Why were they trying to repeal it?  Why was Obama opposed to it?

PIPES: That’s one of the parts of ObamaCare, a reporting requirement, on a 1099 form, for anyone who does business with somebody else if you spend $600 dollars a year or more.  Just think about it: If you buy water for your office, you’re probably spending over $600 dollars a year.  Small business is going to be extremely hurt by this reporting requirement, so Senator Mike Johanns, from Nebraska, introduced legislation to repeal it.  Bill Nelson, from Florida, a Democrat, also had a form amending the 1099 requirement.  Both went down on Tuesday this week.  Senator Begich has another amendment to repeal the 1099 reporting requirement.  But by doing this, they feel they’re going to raise about $17 billion dollars of revenue, and that’s, I think, why Obama doesn’t like it, because he needs all the revenue he can get.  But I think one of the things that can repealed in 2011, if the Republicans take back the House, is this expensive 1099 requirement, which is going to be harmful to small business, and, really, will destroy the job creation that comes about from our new and our small business.

ARONOFF: What do you think is going to happen with all these state challenges?  They’re largely against the mandate that people have to buy insurance.  Do you think these lawsuits from the states have a chance of derailing this?  Or is it going to be too slow, through the process, to make a difference?  How do you see that?

PIPES: The individual mandate, of course, I believe, is unconstitutional.  We have seen, in Virginia, Judge Hudson ruled that the Virginia suit against the federal Department of Justice can go forward.  About a month ago, in Missouri, 71 percent of voters voted in favor of banning the individual mandate.  And just this past week, in Florida, federal judge Vinson said that by October 16th he’s going to make a decision—but he’s probably going to allow a lot of that suit, the Constitutional challenge suit which is being filed by 20 states’ Attorneys General and the National Federation of Independent Business, to go forward.  Ultimately, this will probably be the lawsuit [that] will have to go to the Supreme Court.  I would hope that it would be overturned, and the individual mandate would be overturned, in the Supreme Court.  But, of course, one can’t always depend on the Supreme Court, because, in many decisions of late, they have said that if the Congress approves something, they don’t want to go against what the elected representatives do.  But my feeling is, we do want this to go to the Supreme Court, and if the individual mandate is ruled unconstitutional, it’s going to destroy ObamaCare.  But, in the meantime, I hope the Republicans can take the Presidency in 2012, and the Congress, so that in 2013, then there would be a great shot at repealing the whole legislation and replacing it with health care reform that will bring about competition, and reduce the number of uninsured, and make a lot of changes that, I think, the American people will be happy with—because, even today, 58 percent of people, Americans, polled, want to have this health care legislation repealed.  Obama, Pelosi, and Reid went against the will of the American people and pushed this through, and not a single Republican voted for it.  And, as I say, the American people were against it.

ARONOFF: Donald Berwick is the man Obama picked—by recess appointment, no less—to run this entire department, this entire legislation.  Gives him a larger budget, I think, even than the Pentagon—or pretty close.  But he wouldn’t even allow him to go before a Senate committee, or a Congressional committee, so people could question him.  What should we know about Donald Berwick?

PIPES: Dr. Donald Berwick is a medical doctor, a pediatrician.  He’s from Harvard.  He also ran his own institute of health care in Boston.  He is a huge fan of Britain’s National Health Service, which is the British government-run health program.  He calls it a “seductress” and a “global treasure.”  Under the National Health Service, in Britain, they have an organization called NICE, the National Institute for Health and Clinical Excellence, which makes decisions about whether you, as a British person, can have access to a procedure or a treatment, based on whether or not it’s cost-effective, as compared to medically effective.  And, of course, Don Berwick said, “It’s not a question of whether we’re going to ration care in America, it’s whether or not we’re going to ration care with our eyes open.”  He is the recess appointment, new administrator of the Centers for Medicare and Medicaid Services—he has a tremendous amount of power.  But I think our seniors are waking up to the fact that they are going to be facing rationed care by these cutbacks in Medicare spending, their access to doctors—they really are beginning to believe Sarah Palin, that there will be death panels.  Because if you’re denied—a lack of access will lead to death.  Don Berwick will also be overseeing this Comparative Effectiveness Research organization—which will be also determining whether a new drug, or one of the new biologics, which are very expensive, will be cost-effective, as compared to medically effective.  We’re seeing this already, with a breast cancer drug from Roche-Genentech called Avastin.  An FDA—Food and Drug Administration—panel, a few weeks ago, said that it was not cost-effective, and so they are suggesting that it be banned from the FDA list.  This is not the role of the FDA, to determine whether something is cost-effective.  They’re really about safety and efficacy.  But this Friday—tomorrow—the full FDA panel will decide whether Avastin is going to be able to continue to be available to women with breast cancer.  I have written several op-eds on it—there’s a great survival rate from people having access to Avastin.  But if you’re trying to control your health care costs, like Don Berwick will be, this is what will happen: A lot of the latest, and more expensive, drugs will be considered “too expensive,” and so won’t be available.  So I think the Don Berwick recess appointment was really very bad on the part of Obama.  He did not keep up to his promise that he was going to bring transparency to the government.  Everything is completely opaque.

ARONOFF: Unfortunately, we’ve just got a few minutes left.  You write about the concept of how the third-party payer system got us in this situation that we were in, and that it has not served us well.  Use that to tell us your ideas.  If you were designing the health care system from scratch, or if you were attempting to fix the current system with free market, or market-oriented, solutions . . . give us your take on that, please.

PIPES: Right.  Well, I believe that we need to empower doctors and patients, and encourage innovation in drugs and medical devices. We need to get away from increasing the role of government in our health care system through mandates, increased mandates, taxes, subsidies, and controls on insurance companies. Most people in America don’t realize 50 percent of our health care industry is already in the hands of government, through Medicare, Medicaid, S-CHIP, and the VA.  I’d like to return to empowering doctors and patients.  The government got us into this during World War II, when wage and price controls were in effect. The tax code was changed so employers, who were having a hard time attracting workers under the controls, were given the ability to write off the cost of the health care that they provided, and employees get their health insurance tax free.  If you lose your job, because insurance isn’t portable—and certainly during this recession, that’s why we’re seeing, I think, the numbers up to 50.6 million uninsured, because when people lose their job, they lose their insurance—you go out into the individual market, if you have a preexisting condition it can be very difficult or expensive to get insurance, and even if you do, you have to buy it with after-tax dollars.  I would like to see the tax code changed so individuals can buy their insurance with pre-tax dollars, just like those who have employer-based insurance.  And, ultimately, build up the individual health insurance market.  We do not get our life insurance, our home insurance, our long-term care insurance through our employers.  We should be getting our health care through ourselves, and it should belong to us.  I think this is a very, very important point: We need to build up the individual insurance market, and allow people to keep their own insurance and carry it through life, and not be tied to a job because they’re afraid they won’t be able to get insurance.

ARONOFF: Okay.  One more thing is media coverage.  Since we’re Accuracy in Media, put on your media watchdog hat and tell us how you see how the media has covered, say, the debate leading up to the legislation, and since then.  Do they seem supportive of this?  How do you see the mainstream media on this?

PIPES: I would say the mainstream media, of course, always likes to increase the role of government in our lives, and Obama, Pelosi, and Reid believe that government can make decisions for the American people better than we can make for ourselves.  It’s an ideological vision that they have, and that is not the American way.  This debate since January of 2009, and even before, on health care has been covered a tremendous amount.  Fortunately, we have Accuracy in Media.  We have Fox.  We have The New York Post, The Wall Street Journal, Investor’s Business Daily, a lot of talk radio.  They have covered this debate very, very fairly.  And then I have done a lot of media and speeches and debates on this.  But if you read The Washington Post, The New York Times—I debated Howard Dean on CNBC, who’s a huge single-payer fan—I think the mainstream media has definitely been biased towards government takeover of our health care.  But, fortunately, as I say, talk radio, blogs—all of these things are at least educating the American people.  I think that is why 58 percent of the American people would like to see this legislation repealed and replaced.

ARONOFF: Are you an optimist or a pessimist when it comes to that?  Do you think that the new sheriff will come to town soon enough to change the tide in the course of events here?

PIPES: I certainly hope so.  I’m an optimist.  But, you know, the Republican party is going to have to get a very strong candidate to run in 2012 against Obama, and if that person wins he’s going to have to be very strong about herding those cats around the idea that repeal and replace is the only thing that’s possible.  People say, “No legislation is ever repealed.”  Well, in 1989, Medicare Catastrophic was repealed, and Dan Rostenkowski was run out of Washington, D.C.  It can be done, and I think it will be done.  But it’s going to take a lot of fortitude and a lot of strength on the part of the Republican party.

ARONOFF: Okay.  Just want to read one other line from your book that I found fascinating.  You say, “In fact, upon close examination, every penny of ObamaCare’s supposed savings is an illusion—a cheat through a series of legislative and accounting gimmicks.”  So that’s what we’re up against here.  A lot of gimmicks involved in this.  Our guest has been Sally Pipes.  Just quickly tell people where they can find your website, and your book, and we’ll leave it there.

PIPES: Thank you so much.  Our website is www.pacificresearch.orgThe Truth About ObamaCare, Regnery Publishing, is available on amazon.com, or through Barnes & Noble, Borders, or your local bookstore.

ARONOFF: Thank you so much for being with us today on Take AIM.  We will be back next week with another show, taking a look at issues not covered very well, or at all, by the mainstream media!  Thank you, and so long!



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