tv Tonight From Washington CSPAN December 17, 2012 8:30pm-11:00pm EST
and also be helpful for the newspaper industry. >> host: one more question. >> guest: again, you talked a little bit about it but what effect will timeshifting people view things over the internet on linear program channels? >> guest: it's going to have an impact but i believe broadcasters because of the public's values they serve, because it's free and because it's local, we are a survivor. when television came along everybody said radio was dead. when the internet came along and cable and satellite everyone said broadcast is dead and now we are still very much alive and well in both radio and
television because we have an architecture and a niche that is hugely important and obviously capturing the eyeballs of the american people? >> host: where you sit at the seat of national broadcasters what is the job going forward? >> guest: to preserve channels that are not interfered with in sufficient volume that we can innovate in the future and provide these remarkable new television experiences, which are not just the near horizon, but they are here. and within this decade you will see television sets for which you cannot imagine. i have been to the labs in tokyo and is better than 3-d. it's not even for k., it's ak and it's also high-definition. it's astonishing.
the american people should not be denied that because we are somehow cannibalized out of some sort of new public policy that says the world is far as broadband and broadcast. >> host: senator gordon smith joins us as we began discussions on the future of television and he is president and ceo of the national association of broadcasters. thank you, sir. and ted gotsch from telecommunications report thank you for being on "the communicators."
c-span: anne applebaum why do you open up with the quote from winston churchill? >> guest: i open up of the quote because churchill is defined an era where talking about probably without meaning to. he coined the expression the iron curtain and it was such a motive and such, and such an evocative description of what had happened between 1944 and 1946 when he gave his speech that the quote comes from and i thought it was important to put that at the beginning of the book. c-span: did you ever find out why he called at the iron iron iron curtain? guess so there's x. a long and complicated story. it's actually a theatrical term. there was an iron curtain at theaters that he could use. they would put down the iron curtain to prevent fires in the theater so the term was kicking around in victorian england as an iron curtain and it was viewed by other people but it was churchill who used it first in the private communications
with his american counterparts and then later in that speech. c-span: do you know why he was was speaking in fold missouri? >> guest: he was doing a favorite of harry truman who was, that is where chairman was from. c-span: let's watch a slice of that speech so we can get a feeling for what it was like. >> in the adriatic the iron curtain has -- behind lines and the ancient states of central and eastern europe. warsaw, berlin, prague, vienna, budapest, belgrade, bucharest and yugoslavia. all these famous cities and the populations around them. c-span: why did you want to write about it?
>> guest: i was in the way inspired by my first book. in no way one in of my first books that my previous book which was about the gulag system. it represents a continuation of the -- -- that i had after writing the book. one of the things i got interested about was why people went along with it and why did people go along with totalitarian regimes? what is the institutional pressure, why did camp guards do what they were told to do? why does it happen? i decided to write about this period right after world war ii because it's a time when the soviet union was then had reached a kind of height. there was a sort of -- of stalinism and stalinism was created throughouthroughou t the 1920s and 30s and then it was reinforced by the experience of the war. by 1945, it was a fully developed system with a clinical theory and an economic theory and a clear ideology.
it was exactly at this moment when the red army marched into central europe and began imposing a system on the central european stage. you can see how from scratch, what did the soviets think their system was? what did they think was important to do first and how did they try to. c-span: where did they get the rights to march into eastern europe? >> guest: they were the victors in the war. hitler had invaded germany in 1941 and a font back against the germans and they kept going to berlin. c-span: defines stalinism. >> guest: stalinism was a developed system as i say in it was a system of complete control. the stalinist state believed he could control everything. he could control not only politics and not only economics but it could control social life and it could control civic life. it could control sports clubs and chess clubs.
in the stalinist system, there were no independent institutions of any kind and no independent voices of any kind were allowed to speak. all the economy was under state control and all of society was. and there was a cultural aspect. the arts were under stalinist control and there was also it cult of stalin's portraits that hung everywhere. all of society was organized around his name and his image. c-span: i grew up in a small town in indiana and one of the main streets in my neighborhood was chris's street. it's not the way you pronounce it but you talk about radio causes in here. we never knew what causes was. >> guest: he was a hungarian hero of 1948, of an earlier period and much raid -- later on radio causes, this is the later part of my story, was in 1956,
free hungarian radio and they adopted the name of a previous hungarian liberating hero and they applied it to that radio. that was in 1956, stalinist radio. c-span: in 1956 what were the circumstances? >> guest: 56 is the end of the stalinist period. by $1956 arty dead. he died in 53 nasty 53 people wanted to reform the system. in 1956 you had the revival of what i just described. stalinism when it was brought into eastern europe it was an attempt to put everything under state control. 56 was really the revenge of civil society when people began reorganizing itself and reorganizing social life. independently and spontaneously and among other things creating independent radio stations. c-span: you said in your pocket take you six years to do this.
>> guest: it depends how you count. c-span: what i want you to do is take a little time, back up and tell us what you went through. where you went and what you were trying to find out and how you did this book. >> guest: as i said, the idea was i wanted to explain how totalitarianism happened. we do know the story of the cold war. we know that the documents we had seen and our times describe between roosevelt, stalin, churchill and truman and we know the main event main event from our point of view. what i wanted to do was show from a different angle, from the ground up, what did it feel like to be one of the people who were subjected to the system and how did people make choices in that system and how did they react? and so, i started very systematically. i went through archives in warsaw come in berlin and
budapest. i look to government archives and i looked at party archives. i looked at the police archives all of which are now open. open. some are easier to use than others and some countries give you better or worse access in some archives closed and basically in this part of the world the archives are -- and and a list of specific institutions, so i looked at the hung gary and film industry and which was one of the biggest and most powerful film industries in europe in the 1930's as we know because so many of its leaders were in this country during the war. how did you become a social realist film industry. i looked at german painters and germany had a very vibrant expression, abstract art in the 1920s and 30s destroyed by hitler. they went abroad and they came back to berlin thinking they would be able to paint who they
wanted. they discover to their horror that actually they were not going to be allowed to so how did they react and what did they do? some of them taught himself painting and they try to paint and social realist in stalin's way. i looked at economic questions, and in particular i was interested in small shops in retailing and this was in some ways the hardest part of the economy to control. i looked at the files of the industry of economics in germany and poland. i looked at the secret police documents because i was looking for the origins of the secret police. how was it created? who were the people who were the original secret police and where did they come from and how were they trained? i went through all this and in addition to this i use soviet documents, some which have been published or had been made available in the '90s and aren't available any more. there is a wonderful collection in warsaw in about 1991 or 92,
the polish military archive center researcher and a couple of -- to moscow and they xeroxed all of the archives that had anything to do with the red army, the liberation of poland in 1944 and in particular its first encounters with the polish resistance. so it's all xeroxed and you can read in warsaw. i don't even know if we documents are excessive on moscow. there was a tremendous amount of available and in a way my problem was what not to use. in addition to the archives, i -- as well. c-span: where you live do you live now? >> guest: i now live in warsaw although i spend a lot of time here. c-span: how old are your kids? >> guest: my kids are 15 and 12. c-span: where do they live? >> guest: they live some of the time in warsaw and from the time in london.
my husband is a polish foreign minister. c-span: how did that happen? >> guest: he was a foreign minister when i met him. he was a journalist which was what i was in 1989 when i came to report on the collapse of communism in eastern europe. we drove to berlin on a november night when the wall fell that i think sitting on the wall chipping away at it with a chisel. we got married a year later. c-span: what did that mean at that time? what it did feel like when the two of you were sitting there in that wall came down? was at november 1989? >> guest: 1989. first of all, people had forgotten how much fun it was to really -- it was very exhilarating at this time in history but they had also forgotten how nervous people were. i remember sitting on the wall and we were there, it was at 4:00 in the morning and everybody was awake and everything was open.
there were many hundreds of people sitting on top of the berlin wall. the east east german guards was still there because there was a ball and then there was no-man's land and there was a second wall. they were standing in between the two walls. and very nervous, wearing riot gear. at 4:00 in the morning everybody drank champagne and they had sung the national anthem. what do you do next so they started to rather drunkenly tease the guards. people started to jump off the wall from the west into the east and the guards would throw people back over the wall. and it wasn't entirely a satisfying moment. i discovered many years later that actually as we were sitting there, the east german politburo was trying to decide what to do with us, these people were sitting on the wall. so it could have all ended for us. c-span: we are going to run some video on your husband when he was on our show and he was with the american enterprise.
here he is. >> product sikorsky has been defense minister for how long? six weeks and prior to that you have been living in the states, correct? >> i think in here washington. before i was a deputy minister in the early '90s. >> here in washington you are known as mr. anne applebaum. >> i am proud to be married to and though. c-span: that was seven years ago. >> guest: he was so young. c-span: does he look that young today it is a foreign minister? >> guest: he looks wonderful. c-span: what does it mean that he is now the foreign minister of poland and how does that figure into all of your interest here are? >> guest: it doesn't figure in directly. i have a background of knowledge and sympathy for that region that i wouldn't have otherwise and i think he doesn't influence
any direct way. he is not sitting with me in the archives while i'm looking up to see what happened to the film directors in 1947 and he would be too busy to even help me write my book. knowing that region and having lived in it and having this 20 year long connection with it gives me some empathy or some interest in what happened there. c-span: what are the residuals from world war ii and the iron curtain period today in europe? in eastern europe. anything? >> guest: is interesting, one of the things that has happened since 1989 is the region least to call eastern europe have become very differentiated. these countries no longer have anything in common with each other except for the common memory of communist occupation. poland is different from bulgaria and albania as greece is from finland and europe is divided in different ways and has changed quite a lot.
i would say there are a few elements though of a communist the communist past that you can see in post-communist countries. sometimes there is a paranoid elements and politics that comes from just a legacy of people being spied on and people having lived in an oppressive system. they are more paranoid about secret deals being done behind their backs. secret deals were done behind their backs and that is untenable and there is an anxiety about being less behind or left out by the west and seem to be inside the western hands. the memory that continues to play out but in truth these countries are more different from one another than they are similar. c-span: you chose three of eight countries behind the iron curtain? and what were the three? >> guest: i chose poland, hungary and east germany? c-span: why those three? >> guest: i chose them because they were different because they have horse -- different historical backgrounds and they had a different political and
mostly because they have very different experiences with war. germany was of course not see germany and poland had resisted very strongly than not sees and one of the largest resistance movements in europe and the hungarians were somewhere in between. they were reluctant collaborators with a nod to set some point that they also had element so i was interested in having had the very different experiences of the previous five years, how did they now react to the soviet invasion and the subsequent process? c-span: how would you define the situation in each of those countries today? their lifestyle, the economy, the openness, the democracy in all of that? >> guest: all three democracies, east germany and of course it's part of germany and so it's indistinguishable now in the legal system and west germany is much poorer than east
germany and some wise poor than poland which has as a country, has covered more vigorously than the eastern part of germany. poland is a very vibrant democracy and maybe to vibrant knowingly vibrant and it now plays it very important and central role in europe. it's a member of the e.u. and a member of nato and the largest of the eastern european country so it has perhaps a larger role in that region than anybody else. hungary is also still a democracy and it's also a liberal capitalist state. it's a less happy place. it has been badly governed in the last 20 years, extraordinarily actually it is still in many ways, there are many hungarian institutions that haven't been reformed very much since 1989 and now there is an unattractive far right in hungary.
there is an unattractive left as well. it's a less happy and stable state but as they say it still democracy and a very open society. c-span: at what point in your research did you say, i didn't know that? >> guest: oh, constantly. i was constantly running into -- one of the things that happens when you read archives and when he read communist party archives, he discovered that behind closed doors communist officials are much more open than they are in public so they are always saying things to one another. they understand their society fairly well. they are driven by ideology and they believe in their ideology which is an important point. we often now tend to dismiss that. they were just mouthing these slogans. they were not mouthing them. they believe the politari and -- was coming and if we press the right buttons we will be able to create it. they are constantly surprised by
what goes wrong. is supposed to be happening this way. the peasants and workers are supposed to be supporting us and they should vote for us in these elections but they don't. why? what's wrong? they argue that we need more ideology and we need more of this and more that and we discover the factories are producing as much as they are supposed to be. why not? maybe we need different things and they are always looking for ways. they have the statistics and the evidence and they know what has gone wrong and they can't figure out how to fix fix it. it happens over and over again and that is the most surprising. c-span: how did the leaders live in those three countries compared to the politari and? >> guest: the leaders live in nice lady communities. they live in villas and they were cut off from society. in this period particularly they have access to privileges that may not seem so extraordinary to us but at that time they have indoor plumbing and they had access to all kinds of food when
there were great shortages. the leaders were very isolated and very protected, often surrounded by servants, maids and chauffeurs who were employees of the state, employees of the interior ministry. so they were protected by all sides and there were also very nervous about my keen public appearances. they had a lot of bodyguards and they were anxious. c-span: how did that track with their idea that everybody should be equal? >> guest: it's an interesting question. all the pigs are equal and some are more equal than others. this is one of the things that develop during the revolution. we are working hard and they were about to justify. they would say we are working hard on behalf of the state. we are the avant-garde. we will lead the politari into a full suit of communism. we aren't there yet and until we have reached a full stage of communism we have to have
temporary inequalities. that would have been the justification and that is what they would have said. what actually went through their heads we don't know. c-span: how much did you do yourself? >> guest: i speak and read polish and russian fluently so i have those two languages. with german i had extremely weak german. i spoke some hungarian. i had translators so people who are more than translators, more journalists. they were people who had worked in the archives before and had done different kinds of translations. i literally physically went around with them. we would go with my translator to a german federal archive, sit in the back, open the documents and she would start whispering in my ear. everybody would turn around and they would have to -- but i typically talked my way
through. we read books together. we spent a lot of time together at meetings with translators. and then translator interviews and so on so that was how i dealt with that problem. i thought it was important to -- i didn't have all the languages because one of the reasons there are so few books like mine is because historians feel awkward about using translators and so you don't ever get regional portraits. there are many wonderful books about poland in this period in hungary and germany in this period written in both of those languages and in english but there are very few that try to do a wider range. i felt what i wanted to do was establish a pattern of what was happening in different countries at different times. i felt i could only do that by doing several countries. c-span: you mentioned earlier the russian archives being open for only a very short time. why did they open the archives and who shut them? >> guest: in the '90s
,-com,-com ma period when the russians were in the wake of grass not stand the wake of the soviet union. there was a movement in russia to and secrecy and to discuss the past openly. this was an authentic movement on the ground up and people at the top sympathize with it. the archives began to open in the '90s and were in some ways extraordinarily accessible working with western scholars. there are many instances of that. i did begin to have the impression pours into the '90s, i began to have the impression that one of the other reasons why they were open was because the russians were so preoccupied with other things at that time that they didn't really care. people have often said to me how as a young american, an american woman how cute you be wondering around those archives? i think the attitude was, she wants to look at old documents,
so what? what? we are busy proof reforming our economy. what happened is putin became president of russia and he had a much more instrumental idea of what it was for anti-read politicized history and began to become much more conscious overworked history was told and how it was being told. this really trickles down and he became more wary of what archives were opened and who had access to information. i might add they weren't entirely closed. some particular ones have been difficult, the military archives. c-span: what is the difference -- george w. bush came into the presidency and he made it more difficult to get the archives pushed off time where he could get access to his father's and bill clinton's archives and all that. what's the difference between that attitude and what you have over in these countries? is it a matter of degree or do we really have a different
attitude? >> guest: we believe that in principle it should all be open and then we argue out round the edges of what is still classified and how long should it be classified and when will we have access to at? soviet union until 1991 s. and all of it was closed and nobody would ever have access. and what one worries about is we are returning to that kind of attitude. not just let's wait a little bit longer until we can talk about it that but nobody will have access to the secret entries and the secret and the truth never does get out. c-span: why do they even keep it if they are never going to let it out? >> guest: because they find it interesting. i mean, the kgb writes its own books. it writes its own histories. it's not the kgb anymore but it wrote its own descriptions and kept them and publish them
inside their buildings. c-span: how do we do in a world with openness when it comes to archives? >> guest: the u.s. is actually good. the u.s. is better than many european countries and generally speaking the u.s. archives are easy to use. the cia archives are harder to use. i would actually argue they could be -- you don't want to show from the last 20 years but i know people who have had trouble getting access and in the 40s and 50's. the national archive, i haven't actually worked in the american archives with some friends abort there. i know it's not hard to use. c-span: go back to where you started this book in 1944 and go to 1956. how did the soviets takeover eastern europe?
police. he created domain of these countries, the red army in conjunction with the kgb, secret police forces speaking the local languages. sometimes people coming from the soviet union, sometimes for natives, and began turning them in at this and they began doing that right away. when they begin in 1939. they invaded eastern poland and then it began creating a secret police force than and import those people back into the country in 1944 when they began fighting the germans, chasing the germans out of poland. that's number one. before -- and that institution is then used in turn to target people. so the soviet union does not use mass violence in this time. you did see mass murder. what did begin to do is they look for potential opponents, and this can be church leaders,
resistance leaders, the first encounters between the red army and the polish resistance army, which was called the home army are very violent. the hallmark -- home army expected to collaborate in the fight against fascism. instead what happened was the red army arrested them, disarmed them, and since then east to labor camps. this may sound paradoxical, but it was because they planned from the beginning to eliminate or suppress the leaders of these country, potential leaders, people who might be post-war leaders, and this was, of course , the home army. the second institution -- in a way, they set up repressive organizations are from the beginning. at the same time, the other institution they were obsessed with was the radio. and there were interested in radio as opposed to newspapers or other forms of media because they thought of the radio as the most effective means of reaching
the masses, you know, reaching the peasants, the workers some of the proletariat. c-span: no television at the time. >> no television at the time. not much solace in anywhere at the time in 1945. television they did later. eventually serves a similar function, but in 1945, is the radio. and they -- every -- everywhere they go one of the first things they do is take over or create new radio stations. in east berlin become a central berlin the occupy the nazi radio station immediately on the first day, as soon as they get there. it protected from harm, and some of the very first east german communists to spent the war in moscow and had been flown into berlin are said to work on the radio station. that is so important they considered to be. in poland the creator radio from scratch. all radio equipment was destroyed during the war. created from scratch. the reason is they believe the -- the other think this shows is
they believe in the efficacy of their own propaganda. once we begin to explain to people what we're doing and what we want, they will go along with it. the radio is going to be the means by which to do that, so they carry enormously about this secret police organization, the radio. the third element which may be surprising is, very early before they do -- they eliminate political opposition and before they fully nationalized the economy, they began to target what we would call organizations of societe, so use troops in particular, other kinds of self organized women's groups, women's charitable organizations, charities, church organizations. these are the groups they immediately want to put under state control. they don't want any independent institutions or associations of any kind -- kind come into existence.
c-span: let me ask your of the ymca in poland. >> they did have a building in warsaw. one of the few buildings survive. more arrests. pretty soon after the war people began moving into it. the ymca have some resources. an international organization. resources from outside and was able to do things like bring in clothing sent from the west end to feed people, to set up soup kitchens. also very quickly became, because of a shipment of jazz records that arrived at the ymca, it became a kind of center of social life. it was a place you went to go to parties in 1947, 1948. you can imagine a city in which everything is rubble and there is practically nothing standing. the ymca is a low island. and the ymca, and this poses such a threat and such a problem to -- at the very highest levels, the communist leaders right to one another, angry
letters, we must do something about the ymca. we must destroy the ymca and eventually they shut it down. they close it up and very tragic moment, the communist youth group is sent in to smash the jazz records because it is seen as -- anything that is an island that sells -- self organized a spontaneous organization is seen as a potential threat to the regime. >> at one point you mentioned john paul and pablo picasso. what role did they play? who were they, by the way? >> probably the preeminent philosopher, french philosopher of the postwar time. what of the great modernist painters. both were at one time or another, for part of their lives , communists or communist sympathizers he painted -- u.s.
taken to see a new apartment block that was being built in the city, homes for the workers project. -he painted a picture, a kind of sketch on wall in front of these new apartments which later became the many tourist attraction. there was a couple that was given that apartment 11. they became enamored by the number of people to would knock on their door. they painted over. c-span: if you were going to send people to a number of places today over in asia and
europe that would somehow reflect what happened in those years, or reduce send them? >> i would certainly send them to warsaw. if you walk around warsaw you can walk around and do a visual archaeology and see what was bill when. a number of very prominent buildings. kind of skyscrapers built in the stalinist architectural style. you can see it -- get a good idea of what that time is like a steady. c-span: we talked about it. how many have moved back into either eastern germany or poland or hungary? >> i'm not going to remember of the top of my head. you probably have the summer in the book me many people have
been hiding. morse arrived in hundred and is generally known, particularly the city of budapest. the attack on the hungarian jews happened late in the work. henry's government became -- effectively the nazis took over hungary and the and when the holocaust began. and a large community. a significant figure at that time given the population of the city. in poland this survive in all kinds of ways. many people survived by going to the soviet union command many people come home to find what is left to see what kind of live they made. one very bad and moving document can last many come home just to see the cemeteries and leave
because they don't wanta be there anymore. but they come back. some try and make new lives there. some join the communist parties. the communist party as an attraction for -- a buddy who has experienced the devastation of the war, the shattering of all ethics and all morales lehigh, many people did see in communism a kind of alternative. there was a time, a very brief time when some people so they come back. and some really camino, it's a
strange and cards started tell because sums on the communist party and some immediately come into conflict with the communist party because a lot of them are small traders are merchants.the. they then begin to be large groups. help train qc will fight for independence and palestine. c-span: you write about -- mickey and malice, those two words come up in your book. what that -- what is that about? >> i was describing the origins of the famous song.
a song called -- the song of the party. and basically the lyrics go, the party, the party, the party is always right. more less describes. and i went to look on the internet's version sunday singing the songs that i could hear it, and i found a number of perry's, including a mickey mouse parity, mickey mouse in need. this is -- it became a song that in later years, the last 20 years people have made fun of. what interested me about it is you can make fun of it now, you can do mickey mouse parody's now, but people were seeing it 30 years ago in berlin are 40 years ago in berlin. i began to ask the question, why? what were they thinking? this was the introduction to my chapter on what i describe as a reluctant collaboration, people who go along with things without necessarily believing in them. >> it is in german, and here's some of the language. she gave us everything. always generous. wherever she was there was life.
we are we are because of her. she never abandoned us, even in a frozen world. we were born. she is always right. do we believe that? >> hard to know what people believe. some would like to believe it or would hope to believe it. some people felt they had to believe it. and some people thought it was okay to sing it, even if you not believe it because it was a minor sacrifice to make in exchange for keeping your job, your house, and keeping your children in school. c-span: we found this on youtube. it is not label a very well, so we don't know where it comes from. it makes the point, born in 1900 and died in 1980, and chairman. let's watch. it's only a minute. [speaking in native tongue]
c-span: who are some of the people we saw, besides castro and khrushchev and gorbachev. >> i saw the last leader of east germany, a time i read about, the youth leader, the head of the -- he was called the free german youth, the communist youth movement, walter to brecht, the east german, the head of the party , though little stalinist east germany. he was standing next to william p., who was president of east germany. i saw now. i saw castro. stolen. c-span: what started to break up the control of the soviets and eastern europe? >> in a way, the -- it's very important to look get this time when u.s. that question because, in a way, the soviet union and the soviet system in eastern
europe contained the seeds of its own destruction. many of the problems that we saw at the end began at the very beginning. i spoke already about the attempt to control all of the institutions and control all parts of the economy and political life and social life. one of the problems is that when you do that, when you try to control everything, you create opposition and potential dissidents everywhere. you tell of artists that they must pay the safety of paint the same way and one says he doesn't want to, you have just made him into a political dissidents, somebody who might otherwise have been apolitical. if you tell was cut troops that they're not allowed to the boys' deaths anymore and now they have to be young pioneers, which is what happened in number of countries, and one group is set decides they don't like that and so they form a secret underground boy scout group which actually happens. underground scouts were very important in poland of throughout the communist time, you just created another group
of political opponents from an apolitical teenagers. so the system created pockets of resistance and opposition all over. the other -- just as important, the other element of the system you can see from the beginning is the gap that begins to grow between the ideology and the reality. the communist leaders continue to say, this is what things a going to be like. this is what should be happening . we read marxist doctrine, and this is how things will develop in the economy will grow. does not happen that way, or it happens sort of, but not really. there is some growth, but the west is growing much faster. the fact that the system is never able to fulfil its promises means that by the end, by 1989, even the people leading the do not believe it anymore. as a loss of faith in the system , which begins in the '40's and simply grows worse and
worse overtime means that there is nobody left to defend it. 1989, not even the soviet leaders of the very highest levels was really able to defend the system. once gorbachev and the late 80's began the conversation about history, what is really wrong, how our system is set up, as soon as people did not have to collaborate anymore and they did not feel obligated to go along with what the party wanted and to sing a song or to keep chanting the party is always right, then they stopped, and they stopped very fast. c-span: after the wall came down we went over ended at 30 our special in east germany. and i just remember interviewing a man, i believe his last name was zimmerman, who was one of the light 66, one of those that started the revolution, the revolution they're outside of the upper house. he turned out to have been a member of the stasi and -- i
don't know what the word is, arrested on his own family. he ended up moving. i'm not sure he's allowed today. what kind of mentality is it when you -- i mean, here's a guy that help the revolution, but he was a member of the secret police in east germany. >> discretion collaboration is incredibly complicated, and more so than we in the west like to think. people very often work one thing or another. there were not only collaborators. there were some collaborators, and there were some real heroes of resistance, but many people zigzagged through their lives. they collaborated at times are they marched and then made a parade. and at other times they -- even telling jokes behind the parties back or agreeing to help somebody who might be -- high somebody might be in prison. people often did, you know, they tried to find a path which they
felt was moral and right. and it's time when the state controls everything, everything, this is very difficult. and i find it often helps to think about, if you have children, would you be willing to say to my won't march in the may day parade, i want to all of these things if you know that it means to your child will be expelled from school and won't be able to study and what have a future and won't be educated? these were really dramatic and radical choices that people made. they had to give up things that it would not ever occurred to us that we would have to give up in order to make a political point. obviously it is more drastic to become police informant, although even then there were degrees, people who thought, i will inform a little bit and won't release say anything important, and i will do it so that i can protect my wife who is ill and needs to get medicine from the hospital, and if i do this then i will good medicine for her, and she will die.
so even then, sometimes the choices are much more gray and more complicated than we now imagine sitting here in a free society. c-span: even though you say we are free society, was a difference between of the favoritism that was played back into the people of the party and what goes on in this town when you are in power and we have gate earmarks or -- pitch your moment. the people in power your dish out favors to people based on whether or not you have follow the party. what's the difference? >> well, i mean, the differences, there is no threat of violence behind it. that is one difference. if you don't vote for the republican party or the democratic party, you don't go to jail and you're not going to be arrested and your child will not be expelled from school. there is really a dramatic difference between the consequences, the kinds of
consequences and the radical nature of choices that people had to make. the second difference is that our system is more or less open. so we know this stuff goes on and we can have an argument about and discuss it and and, of course, the communist system was entirely closed. you know, there was a high level of secrecy. allstate affairs, of political affairs. you did not necessarily know what was going on. some. c-span: are there any lessons in your book -- this may sound like a stretch, the people who live in china. i mean, this government's, it is -- you know, i don't know whether you call it -- certainly there is not the openness. well would you say to the leaders of china about there future? >> well, i would start by saying that the chinese leaders have drawn lessons from the story. the chinese leaders know this piece of history. of course, there's a similar time in their own history. and they also have studied very
carefully the 80's in the end of the soviet union. and one of the decisions that they have made based on studying this piece of history is, they have made contemporary china less totalitarian in the sense that they do make people march in parades and they have abandon ideology in the sense of making people repeat things they don't believe in. and the pressures they put on people are coming in that sense, less. it is a much more subtle system where you are allowed to say some things in some context, but not others. you can talk about corruption, but you may be cannot criticize the party directly. there are these unwritten rules of speech that they have established. it is much more sophisticated and while describing this book. but i would say that what the chinese will have to be careful of is the moment when the basis of their legitimacy begins to deteriorate. right now their regime argues that it has the right to stay in power because it is bringing
fast growth. because it is the mayor credit system where the people of the top boss -- the people at the top are all specially trained. as growth falls and as it becomes clear that some of those people at the top bar, in fact, children of important people and maybe they're not -- they're not so -- such wonderful merits. and i think the regime will have to find other ways to make itself legitimate if it is not to begin to encourage the kind of public discontent in protest that we saw in 1989. c-span: your husband is a foreign minister. he lived in warsaw part of the time and i guess what is the difference, the life of people who are polish and live in poland and the people who live in the united states, and rare type your freedom and openness and democracy. >> nothing of significance. i mean, people here in the united states are wealthier than people in poland is the general, as a general.
in terms of civics, freedom, political freedom, i don't think there is anything different 54 what about the social -- that's not the word i'm looking for, but the overall network, social network, the -- how well they take care of people in poland versus how well we take care people in the united states? >> you're not comparing apples with apples. the united states, it would depend where and with state and you're talking about a much you mean. poland is much smaller. i would say that in this country civil society is far more developed and far richer. the range of charities and, you know, institutions that we have here that have developed over 200 years is the greater. poland, for that reason, does have a very develop civil society, one of the most impressive things that happened in 1989 was pretty much the next table setter organizing private kindergartens because everybody wanted -- there were people who were ready to do things right
away and volunteer organizations were created are way. poland does have some of that, but you don't have the deaths of it that you have here. you do have state health care in poland as your in europe, and it varies. c-span: does it work? >> sometimes it does and sometimes it does not. it depends on how sick you are and what your problem is and what part of the country live in c-span: cost of living. >> cost of living is lower, significantly lower, but, again, you know, salaries are lower as well. c-span: in the back you go down a list of people a supported you in this project. how does this happen jack national endowment for humanities, state foundation, the smith richardson foundation, using a loud, the american enterprise institute. paul gregory at the hoover institution. how do you get support for something like this? >> i write letters and asked. there is no secret.
c-span: what to they want? >> they have a formal application process. you fill that out. you apply. you get references. u.s. for grants. i am one of many hundreds of grantees. thirty-four how much time does that take you to get this kind of support? >> it depends. sometimes it takes a lot of time. i mean, i described to you my intense relationship but my translators. i could not have paid for them and their time if i did not have some support from a range of institutions. c-span: who would read this and making the happiest? >> i want people who, you know, people who are interested in the history of europe but @booktv history of the world, but you don't know anything about this region. i would be most happy if people who read it here don't know anything about poland or about communism more about russia. people who are new to the subject. if they read, a teenager's read it, people in the twenties read it and i will be happy.
c-span: what is the difference between being a marxist-leninist , and stalinist? >> well, marxism will amend it -- marxist leninism describes a philosophy and a very complex and deep philosophy. being a stalinist implies something more political. the stalinist implies that you are a follower of stalin. marxist-leninist the broader term. many stalinist is the narrow terms. a brilliant. c-span: what is italian fascism verses german fascism? >> they have similar routes. the word totalitarian comes from italian, and it was a word first use by mussolini, and it was miscellanea coined some of the best definitions of the word. everything within the state and nothing else i the state. ..
c-span: and how often do you still write for "the washington post? >> every other week. c-span: and what's the mission? what is the -- what do they want you to coin the column? >> they seem to want me to do whatever i want to do. what i usually want to do is provide some perspective on international and even american affairs from a different view.
i live outside the united states. i might see foreign policy, or american policy from a different angle. and i think that what i can do on the page what others can't. c-span: and your kids are going to do what? have you figured out if they want to follow their mom. >> it's hard to want to go to journalism now. i often have people to ask me. it's dpiflt. they are both bilingual. they are both interested in history. one seems interested in science. c-span: the name of the book "iron curtain: 1945-1956".
for a dvd copy call 1- for free transcript or give your comment visit us at x-and a.org. they will available at c-span pod cast. one of the things that surprised me a little bit, i didn't, you know, conduct a nationwide survey of gun owners, among people who had owned guns that i talked with, i found that very often the reaction, you know, your way of sympathies before or after you got a gun is very different. i think any law-abiding gun owner realizing when he has a gun, he or she, that it's a huge responsibility. you have -- if you use the weapon irresponsibly or wrongly, you can get yourself in to trouble, of course, you can
cause unnecessary misery and death even to people who you didn't intend to do harm to. it makes you very careful. or it should make you. and for most people it does. ting would make people more careful if they had to pass some kind of a test before they can -- >> host: like driving a car. a former "new york times" editor. "living with guns" a liberal's case for the second amendment. saturday night at 10:00 eastern on booktv after words. up next on c-span2, discussion on raising medicare eligibility age. later debate on how to improve
the quality and safety of health care in the u.s. tomorrow a senate panel looking at computer stock trading using private exchanges. this practice is sometimes called dark pool trading because details of the trades are concealed from the public. live coverage from the senate banking security begins at 9:30 a.m. eastern on c-span3. later in the day here on c-span2 remarks from leon panetta at the national press club. he was in afghanistan last week. live coverage 1:00 p.m. eastern. next a discussion on the possible benefits of consequences of raising the medicare eligibility age to 67. medicare's eligibility age has been discussed as part of a comprise package to reduce the federal debt and avoid the
fiscal cliff. we hear from the kyeser family foundation and the alliance for health reform hosted the hour and 35 minute discussion. >> if i could have your attention, we're going try to get started. my name is ed, i'm with the alliance for health reform, i want to welcome you on behalf of our board of directors and honor ee leaderships senator rockefeller and blunt to a program about proposals to gradually increase the age for medicare eligibility, whom 65 years to 67. it's a topic that's been under discussion far long time. back when i was on the staff of the then existing house aging committee, this was a topic that came up from time to time. it's particularly coming up now, of course, in light of the ongoing rise in the age for full
social security benefits from 65 to 67, and of course, it's front and center in the current discussions about how to curve the federal deficit and avoid having us fling overs over the so called so-called "fiscal cliff" in a couple of weeks. we are trying to sort out the plus and mineses of the -- minuses of the proposal. which we find is more complicated than one might imagine, it's complicated further by the shifting landscape of medicare policy, federal health care policy, in light of the affordable care act, and the state of the health care system generally. hence today's program and we're going take a close look at some of the pros and cons with the help of the some of the country's leading medicare and retirement policy annalists. we're pleased to have as a
partner in today's program the kaiser family and we're happy to have as a comoderater today tricia newman who is the senior vice president of the foundation and cricketer of the program -- director of the program on the medicare policy. a quick note for you, if you are watching live on c-span for or that matter watching the when cast which will be available beginning sometime tomorrow, you can find copies of the materials that have been handed out to those in the room including copies of the slides that the speakers are going use, and tricia will be using some collides as well. on allhealth.org. and kff.org. so follow along, if you care to, and have the reck sit technology in front of you.
tricia, thank you for being with us. and thank you for cosponsoring this event. >> thank you, and it is great to be here, and i'm thrilled we're here to talk about a topic that seems to be front and center. this has been an issue, as ed said, raising the the age of eligibility has been talking about for many, many years. it seems to be on the front burner today. it seems we can call it an on again off again proposal. it's not clear where it is in current budget discussion. i think it's important that we are all here to understand what the policy means and what the potential implications could be. i'm just going -- briefly set up the remarks from the colleagues, if i can. -- [inaudible] >> could i have the fist slide?
great. okay medicare eligibility has been the idea of raising the age of eligibility is something that on the table. it has been talked about. sort of in con jen junction. why is it on the table? i think the most obvious answer is because it would be a source of savings for the federal government, and for medicare. the congressional office when they last looked at the option said it would reduce medicare spending by 113 billion dollars over ten years. if the age of eligibility was phased in over time, increase by the way the savings would be considerably higher if were not done in an environment where the health reform law was passed and including federal spending for sub i subsidizes for people in the exchange and the cost associated with low-income people who should shift to medicaid. prior to the health reform law, when people talked about raising
the the age of medicare el little bit the big issue is what would happen to 65 and 66-year-old who lose access to affordable congress and may not be able to get the coverage at all. with the health reform law about to be implemented the discussion has changed somewhat since the health reform law provides avenue news for people to get coverage. there's a lot of unanswered questions. the supreme court decision and the flexibility it has given states raises questions about whether low-income people throughout the country who are 65 and 66 will be able to get medicaid in every state. this is at the great example of a policy that seems very straightforward for medicare. medicare saves money with fewer people on the program. but i think as you will hear, this policy has ripple effects across the health care sector. i'm looking forward to the panel
discussion so we can learn more about what the effects might be. >> thanks very much, tricia. quick logistic notes. there are lots of terribles in your pact. those are part of on what is on a one-page list of materials that is available on the website that's much more extensive, call your attention also to the blue evaluation form, which we hope you will fill out to help improve the programs and cover topics you would like to see us cover, and when we get to the q & a, there is green card in the et, you can write a question on as well as to use the microphone to ask the question orally. so let's get started. we do have, as i said tear rib panelists who will give us brief presentation and get to an extensive interpanel
conversation and q & a. we're going start with dr. juliette cubanski who is the associate direct are of kaiser medicare policy program and main author of a series of able cease looking at proposals to reshape the medicare program. see, for example, the pretty blue monograph on the packet on raising the medicare eligibility age. juliet, thank you for being with us. thank you, ed. there we go. is that better? thanks, ed. and as said i'm juliette cubanski associate direct are of the program on medicare policy -- of the option to raise the age of eligibility for medicare. i'm going dive in to the results
of a study that we at the kaiser family foundation conducted with colleagues that act warial research to analyze the effect of raisings the age of medicare from 65 to 67. if the proposal is fully implemented in 2014. i'm sorry can i go back? so we assumed full implementation in 2014 at the proposal in order to calculate the full year fully implemented effect in the current budget window. although most of the proposals to raise the age of eligibility would phase in over time. our study is the first to look at the effects of increasing medicare eligibility age in the post aca era. and that's important because it to scare some extent alleviates the concern that tricia mentioned that people who lost their eligibility for medicare would lose access to health insurance entirely.
under the law they would have access to new sources of coverage. so our study also goes beyond some of the other analysis to look at the effect of raising the age of eligibility not just on federal spending and medicare spinedding but also on state spending, on out of pocket costs for the 65 and 66-year-olds who shift out of medicare, on employer cost, on cost for part b. premium for remain. on exchange premium for younger enroll lee as well as the totalling health spending effect of the changes across the different payers. we estimated that about 5 million 65 and 66-year-old would be affected. we assumed that all would have coverage from another source if not from medicare the supreme court decision to make the medicaid expansion optional calls this an assumption in to
question to some degree. in terms of the distribution of those bren fish -- beneficiary who are affected, as you can see on the slide 42% would be expected to see coverage from the employer half from retiree plans and the other half as active workers or spouses of active workers. 20% would be covered by medicare including those who would have been covered by medicare and medicaid as dual eligibles. as well as those who would qualify because they have incomes up to 133% of poverty who qualify for the new medication expansion. and just about ho 40-% would receive coverage through the new exchanges. in terms of the effective raises the eligibility age on out of pocket spending the direction and magnitude depends on a number of factors including weather people would be covered by medicare oar receive
subsidies for coverage to the exchanges. our analysis takes in to count expected costs that 55 and 66-year-old would have faced if they were rolled in medicare including part br. premium and people yument for supplement tal coverage. and then they're expected premiums and cost sharing under other sources of health insurance in lou of medicare -- lou of medicare. >> analysis shows about that two-thirds are estimated to pay two-thirds of the five million are estimated to pay more as a result of shifting from medicare to another source of coverage. on average about 2200 more. one-third are estimated to pay less around the new source of congress than they would have paid out of pocket on medicare on average $2300 more. the one-third who are projected to have lower out of pocket spending include people who qualify for the medicaid expansion. and those with relatively
low-income who qualify for more generous subsidizes through the exchanges. the group that we estimated that would save the most is an estimated $860 new medicare enrow lees those with income below 133% of poverty. who receive less generous subsidizes or no subsidizes for exchange coverage and those with employer sponsored insurance. the group that bears the largest increase we estimated to be roughly 1 million people with incomes above 400% of poverty, who receive coverage under the exchange. so now i want to shift to the impact on federal and state spending and the effects on spending by other payers. net medicare savings we estimated to be about 23.5 billion. this is savings from not paying cost for the 65 and 66-year-olds.
who are no longer eligible for medicare. minus the premiums for part b. that those individuals would otherwise have paid. in terms of the impact on total federal spendings, the grows federal savings are estimated to be just over $30 billion, but federal spending increases by about $8 billion for medicare as low-income 65 and 66-year-old shift to medicare coverage by about $9.4 billion for the exchange of subsidizes for those who shift out of medicare and qualify for exchange subsidizes. there's a revenue decline from the part b. premium that are no longer paid by the 65 and 66-year-olds. so on net analysis suggest that federal spending estimated to decline by 5.7 billion in 2014. in terms of the out of pocket cost we estimate higher net out of pocket costs, as a result of
this policy partly due to an increase in part b. premiums. paid by people ages 67 and older who remain on medicare in 2014. this is because you're removing relatively healthy 65 and 66-year-old from the medicare risk pool. that risk pool gets a little bit thicker and costlier on average. there's an increase in the premiums paid by those underage 65 who purchase coverage through the exchange because we're shifting the lower cost 65 and 66-year-old out of medicare and in to the exchange. we estimated employer cost would increase by about $4.5 billion which results from employer plans becoming primary rather than secondary players. wrapping around medicare. now that medicare is no longer the primary payer they become primary. we estimate total premium increase as a result which increase cost for employers and
retirees each of whom are expected to pay about half of the higher premium total. state medicaid spending estimated to increase by just under a billion dollars in 2014. it's a combination of medication spending for medicare part d. -- sew when you add it all up. the bottom line from the analysis is estimated net federal savings of $5.7 billion. net increase cost of $11.4 billion to other payers for a net result of $5.7 billion in increased cost overall. so to sum it up we are estimate raising the age of medicare fully implemented in 2014 would reduce medicare spending less
than previously estimated because of providing subsidizes coverage to those who qualify for the exchange coverage or medicaid. it would reduce out of pocket costs for 65 and 66-year-old with relatively low-income while increasing cost for others include the majority of those ages 65 and 66 with incomes above 200% of abovety. adults younger than 65 in the exchange and senior and people on disability and medicare. our analysis underscores the importance of scarefully assessing the distributional effect of medicare reform of raising age of eligibility. savings to the federal government is an important goal in current discussions within health policy circles, of course, a lot of attention being focused on keeps our eyes on the prize of lowing health care spending. it suggest it's not achieved by raising medicare el jinltd age. with that i'll turn it back to ed. >> thank you.
now we turn to gail wilensky, who has no slide. we don't have to worry about getting her that clicker. she's a senior fellow at project hope. she's also former medicare administrator of former health adviser to the president. one of the most respected health economist and a frequent contributor to alliance program. gail thank you for joining us today. you should see a red light. >> thank you. i'm delighted to be here. i'm going try to make a four or five points quick will, with and look forward to the discussion. i found the analysis as we just heard that causer family foundation has done very interesting in looking what they see as the likelihood of what
would happen if the increase in eligibility were to be instantly implemented in 2014, although, as has been indicated that is generally not the proposal. and while i appreciate the qualification, i think it's important understand there was one assumption that was never made, than is they would any behavioral change as as a result of the change policies for many of us who support the notion of increasing the age of eligibility for medicare, and i'm going to qualify in a minute, it would be within the context of part of a set of fiscal policies that need to be enacted in order to encourage individuals to change their vision of appropriate retirement age from something first anonesuated by bismarck in the late 19th century to is more
reflected to increase long jest and it needs to be consistent with a way to make it easier for people to stay in the labor force longer. obviously this is something that would occur over time and not indeed be instantly put in to effect in 2014. you have in your packet, a piece i wrote early dwrer in the year where i articulated whey thought were emerging elements of bipartisan agreement of ways to try to reform medicare. what a difference in election makes. it was earlier in the year regarded by none other than the president as an element that should be considered as a way to try to reform medicare. times do change. it makes less likely now with the political shift, but i think
it's remaining important issue to consider. let me explain what the pros and cons as i see. first, it is not a panacea for medicare. yes, the 65 and 66-year-olds are healthier that night average medicare individual cbo estimates have you heard range somewhere between 113 and 130 billion over ten years depending on the estimates have been made. nonetheless, as a part of a strategy to try to encourage people to stay in the labor force longer, but not the only one for sure, it makes sense. why is that it? as you know, there's been a substantial increase in longevity, when social security was adopted in 1935, neither men nor women lived to 58, when medicare was adopted in 1965, men were living slightly more than 65, less than until 67 and
women almost to 74, there's been an increase in that and we're now talking high 70s for males and in to the 80s for females. that is not uniform, i understand that. i'm speaking tomorrow at the nih conference on finding ways to reduce disparity. it's clearly true in general. and what we need is try to find ways to try to encourage people to participate in labor force longer, not only for our sake, but for their sake as well. being contributors too rather than net takers from the public fist. it will require a number of changes. this one, if done carefully could be one such component. second issue is that medicare has a serious long-term problem. one that is not likely to be
resolved only by increased financing. as most of you know, there will be a doubling of the population when the baby boomers finish retiring, that is associated with moving from all entitlements second of about 10% now, to more than 15% of the gdp in 2030. that is an indication of a very serious change that we are going have to look going forward. some people have commented that medicaid spending at least on a per person basis looked at over the decade is looking pretty good. the growth and medicare spending is has been beneficially projected z as a result of the affordable care act. to grow at about the rate of the economy. but, of course, we all should recognize that what we are seeing are the results of
projections that incorporate medicares' paying the providers of services less not medicare costing less. this is a really important distinction. paying less isn't the same as services costing less. in fact, it's one of the reasons that the medicare actuary has repeatedly said in public that he questions whether the accumulation of reductions in payment will be able to be sustained because without a real reduction in their cost, it will lead to problems and at least historyically reductions in payments have not been sustainable in medicare for that very reason. they're promising changes that could be implemented in medicare as a result of pilot programs or things going on in the private sector, but right now we need
recognize what we are observing are reduced payments for medicare not reduced costs for medicare. so that is an thash will continue to have to deal with. what we really need to consider is how can implement if we want toism ployment them in a way that recognizes most individuals can work after the age of 65 although there's an increase in the number of people who are experiencing disability and therefore would not be able to work. one is to have a differential allowed so people who are not able to work because of disability would qualify for medicare as it exists now, to some extheant already would exist by default because of the ssi provisions that allow for people to go on to medicare as a result of disability.
there's a interesting concept talking about wrornt raising the age of elt jinlt to spond to lifetime wealth. the idea is to say people who had higher lifetime wealth would be expected to join medicare and perhaps social security at older ages than people who have had low amounts of lifetime wealth for whatever reasons. the issue, really, with is to recognize that the stress that question are going see going forward in the medicare program particularly after the end of the decade even given the asthawms all of the currently legislated reduction in the affordable care act actually occur is going to put enormous pressure on introducing change
in to the system and one as i said earlier that will be hard to accomplish simply by raising the financing. trying to decide what those changes are that make sense, allowing ourselves a little run room so that we could introduce them in a phased way over the course of five or ten years. signally people who going to in to retirement they
aarp long before it became aarp. we have the voice of experience with us. david? thank you, and thanks very much for great work. i'll be referring to some of the numbers as well. i want to talk about who the medicare beneficiary age is. sometimes people think it's a pop translation is better off than it is. so if we could take a look at the first slide. you will see that where beneficiary generally stand from an income perspective, and you can see from the slide that median income is a basically a little bit under $22 ,000. even if you go up to the 75th percent tile. three quarters with incomes of that or less, many of those who are above that level actually have higher incomes because they are still working and have wage income. by and large the medicare beneficiary is a modest income
population. i think it's important whawns we're talking about raising medicare eligibility age. raising the age is very core simply a large cause shift. we're asking somebody to pick up more cost. and one of the folks we're asking to pick up more of the cost are the medicare beneficiaries who are 65 and 66 who are already at modest levels of income. also as you see from the next slide, beneficiary already spend the fair amount of their income on health care spending. it's one of the largest costs for seniors. the typical consider is already spending about 17% of the income on health care. and i know for in talking with lots of our members and having talking to many members of congress, very few of them will come back and say what they heard from the constituents is that people don't think they're paying enough for health care. people are already paying a lot for health care in this country plarly seniors. so when we're talking about a cost shift it's critical to
remember the population income and what they're spending on health care already. another argue thament we have heard is what we should maybe make social security and medicare more similar. raising the medicare age makes sense. turns the issue on the head and doesn't make sense. the social security age while it is raced to 67, you can still get access to social security age 62. so anybody who needs social security can get access to it with an actuarial reduction. people who need to benefit don't lose the coverage. they can get the coverage. so if we look to harmonize you would be talking about lower the medicare age. most people actually claim their social security benefit at age 62. the age at which most people claim the benefit, by the time you get to 65. vast majority of people have already claimed their social security benefits. so this is significant difference between social security and medicare. you can always get access to the medicare benefits. the proposal would be take away
coverage for people who wouldn't be able to get on to the program. more importantly though when you think about social security versus medicare part of the reason that you're trying to talk about raising the social security age, and this again was done in 1983 and still raises the age which gives you a sense of long phase in time that was originally set for the program. it's still happening almost forty years later. the key distinction here is that you can delay getting social security, if you're still working because you don't need social security. if you're stilling working and still have income you don't need social security. you can put it off until later. but few you delay retirement and are still working you still need insurance. that meat doesn't go away. st a fundamental distinction. if you're 5e6 and 66 you need health insurance. where does it lead us to my final slide. when basically shows you the
numbers we are talking about earlier the difference in cost for somebody who is trying to get health care through medicare or through an employer-provided system. an employer-provided system costs more than medicare. and so by pushing people in too a different system in medicare what are we doing? accomplishing raises health care cost not lowering health care cost in the country and the focus here shouldn't be on how much the federal government is spending on health care. the big problem is how much the country is spending on health care. and a generation ago, and i started working we were spending about 10% of it the country's gdp on health care. we are about to those 20%. more and more of the health care dollars is going to health care. and that's the big fundamental problem you should be addressing, and by shifting more people out of medicare in to a
more fragmented costly system, we may be saving the federal government money. we're actually making the underlying problem, the real problem worse. we're going to be spending more money on health care. i think kaiser for the numbers. i think they show it really what is happening here by pushing people in to different programs if you push them medicare or the employer-provided system or by the away talk about the fact that cbo estimates that about 5% or so would be on unensured. not have coverage at all. that we're pushing people to a more costly system. so we're not saving the country any money at all. in fact we're costing the country money. we are raising health care cost in the country. when you think about the big debate we had over health care regardless of when you support the health care reform act, i think most people supported underlying goal of the bill which were we want to improve coverage in the country by lowering health care cost. and this proposal does exactly
the opposite. it increases the number of people who have don't have national hurricane insurance and raises overall health care cost. it's a simple and bad solution, to us. and essentially looking at wrong problem. the problem is health care cost. and we're actually making health care costs worse. and so reject this as a way to move. medicare as a program, can certainly be made more efficient than it is today. we think medicare can do a better job, for example, can care coordinate and with transitions between settings. that's the way to make more efficient to save money and health care and make people healthier and cost lost. by raising the age and telling people you have to pay more for coverage and some won't be able to afford coverage at all. even though who have the exchanges available to them, available for sun cities they permit three to one age rating people in the exchanges who are
65 and 66 will be paying three times as much than a younger person if the health care. those are significant costs we're shifting to the population. i got back to the population we're talking about. we're talking about a population who has been median income of $33 ,000 and as kaisers numbers show, the average cost increases for people seeing an increase are 2200. another 10% of the income would be going health care. i suggest to you for the people it's not an affordable cost share. and particularly for talking about it deficit reduction context and i think if we're talking about the fact it's not good health policy in the down raise the health care cost. it's not a good health policy. some will argue we need for deficit reduction purposes. we need lower the amount they are spending on the health care. it's an important policy. i want to ask you is it right to have the group of people bearing the large costs?
is the group you think should be bearing a huge portion of deficit reduction? i would argue it's not a particularly fair shared burden to ask the group of people to be sharing 10% of the north carolina in addition to the health care costs. it's not something they can bear. so for us, it's pretty a simple equation. it doesn't make sense a matter of health policy. it raises cost doesn't lower them. and increases premiums for everybody else who remains in medicare because you have taken the youngest people and the healthiest people out of medicare. everybody remaining doesn't just affect 65 and 66-year-old. everybody remaining see premium increase estimated about 3.a year. when you move them to the private market, you put the least health to the risk pool and making it worse. everybody will will see a premium increase.
we it's a bad measure for health care in the country. we're asking people who are mean income of $22 ,000 to pick up a huge amount of additional costs. from either perspective, this doesn't seem look a good idea. >> thank you. the final presentation from paul den net the senior vice president for health care reform at the american benefit could counsel. it represents fortune 500 companies that sponsor or administer. about the proposal at hand. thank you for joining us. >> thanks, ed.
and thank you very much for the intiation to join you. for those taking notes i'm going it make three points and even if you don't that may at least help you to understand where the sub points are going. the first point i want to talk about how employers are not the same. when with look at the impact on employers we have to look beyond that in term what employers we're talking about. the second point follows from the first point that the response among employers to a change public policy change of the sort will also vary. it won't be the same. there will be difference responses responses from different group of employers. my third point is context here matters a lot particularly to the same employers that typical would offer the types of benefits to employees and to retirees. so let's go back to the first point about not all employers are the same. i think one of the major contributions of the study that
was done by kaiser family foundation that you'll yet walked through. it's one of the first studies that taking look at the post health care reform world and reminds us that that world changes a lot of typical analysis that was done in the past about the affect of policy change and the medicare program. you need to update the assumptions based on how people will behave and post reform world. in it itself a major contribution. looks distinctional effect of the types of policy changes. when you look just at the employer community i think it's important to understand exactly where retiree health benefits are. there was a recent study in october of 2012 by the employee benefits research institute that found that no great surprise
that the existence of retiree health benefits have been delining and you can mark the decline of retire health benefits from 1990, which was the introduction of the financial accounting standards policy called faz106 which required employers to account for not just the present year liability for make commitment to benefits to employees but the whole stream of future liability and discount that back to the liability books in the current year. that had a major impact on employer's behavior because the biggest outyear liability that they had committed to was in the health care side. so since that time, retiree health benefits have been delining element every year. right now according to the study done a couple of monthing ago there's only 6% of employers overall that provide retiree
health benefits to employees. if you look at firms with over 1,000 employees, now you're beginning to look at where the benefit resides, it jumps up to over 30% of those firms and actually if you took the number even higher, it really get at the kinds of firms in the private sector that still have a retiree health benefit, and those would be an industries like awe auto motive and large places telecommunications defense and aerospace. outside some of the inindustry sectors difficult to find retiree health benefit and also among smaller or mid sized employers, it's basically nonexistence. so the effect for most of us who would reach higher without retiree health coverage from most of the employers essential small are or mid sized employersover even large employers who don't offer would
largely be the extent to which that change encouraging people to work longer in the job something that gail alluded to earlier. is it god or bad? many employers are looking for older workers to stay in the work force long for many individuals, it's also going to be offset by the fact that, again, post health care reform post 2014, that there will be probably also individuals over age 50 or 55 who would no long face job lock and will be able to move out of employment because they're not as concerned about staying in until medicare eligibility age and get coverage through exchanges, or coverage through another employer. there's more freedom to move around than there has been
before. in the margin it will courage some employees to stay in the work force longer because health care typical is subsidized by employers if you remain in the work force 75 to 85% of the cost. as juliet pointed occupy and david also that many individuals particularly vow above 300% of the federal abovety level won't qualify for coverage in the health and -- but not for premium tax credit in the health exchange commissions. would be better off from a health care subsidize point of view by retaining coverage through the employer plan. it won't be true of everybody. some might legal earlier. >> the the response among employers will vary. how to we're talking among those over 1,000 employers and offer retiree health coverage to their
employees or former employees. it's important to know that, you know, in many cases there are two different ways which a individual will retire prior to the age of 65. the duration of the coverage will be if they're fortunate now have have it from the former employer. one is that the coverage end at the time they become eligible for medicare that's what their contract reads. that's the commitment that has been made. so if the public policy is that age of eligibility changes and goes further out, so would the health care coverage. however, others are in coverage that say it is ends at the time that they reach the age of 65. since that was a proxy for medicare eligibility age, and in that case those individuals would be presumably get coverage on the exchange until such time they become eligible for the delayed eligibility date for
medicare. either way, particularly for those employers that would have policies that are written to say that it continues until the age of medicare eligibility they're going need time to confirm to any change of this sort. they can't change them on a dime. but i think more importantly that one of the things that is true among employers generally that offer retiree health is looking for a way to harmonize the strategy between their post 65 retirees and their pre65 retirees. right now what most employers will offer retiree health do for those who are medicare eligible essentially to define contribution a pot of money given by the floir allow the individuals to shop for health care coverage in exchange just for medicare beneficiary which is really about choosing
medicare advantage plans or prescription drug plan with financing that are provided by the reformer employer. employers are already looking at the possibility doing something similar to that for the pre65 retirees, and the availability of coverage through the exchanges may well give them that same ability anyway. in order to move pre-65 retirees to a strategy instead of the employer sponsoring a plan for retirees and having them continue on in the employer's -- they will simply provide financial assistance to the plan than an individual may choose on the own either through a public or the e verging private health insurance exchanges. in an october, 2011 study done by a large benefit consulting firm, they found that only a small percentage of large employers really think it's a
realistic strategy as of 2011 to move employees in to health insurance exchanges as they're developing come 2014. but many more close to 0% of those same employers thought that it was a viable strategy to do so for retirees. a change in the medicare eligibility age may well haste, the change from being a defined benefit plan sponsor for retiring health among employers to more of a defined contribution strategy against something that employers are already doing for the post-65 retirees in many cases. and finally the point that context matters we've heard a lot about that from the rest of the panelists, this won't be a change in all likelihood that comes up in isolation on its own. we already know that it's being discussed as part of the
negotiations between the speaker and the president over possible ways to avoid the fiscal cliff, large employers very actively are up encouraging those negotiations to succeed. it's very important from the health of the overall economy that those succeed or it could come up as part of entitlement reform which gail thinks may occur until 2016 or beyond that could come up sooner or possibly as part of broader negotiation over tax reform. you have to look not just at the possibility of change in medicare eligibility age but the broader context which the change could come about. >> thank you. >> thank you very much, paul. excuse me. get to the point where we can hear your comments, hear your questions, there are green question cards you can fill out and hold up. someone will bring it forward. there are microphones on either
side of the room that you can line up behind to ask your question. and i know tricia has been scwibling question right and left as we were going through the presentation. you want to start us off? >> sure. one of the ideas that gail mentioned that has been put on the table is one by zeke emanuel that would apply a lifetiming earning test so the wealthier people would have a delayed eligibility age. i guess my question as a former administrator, involved with social security and medicare and irs, maybe. what is involved in making that happen? do you think it's a viable option? what would happen to the savings that would be associated with a proposal? >> i haven't seen how zeke proposes to define lifetime
earnings. anyway that goes beyond current income, which the irs is good at calculating becomes very complicated. anything that attempts to define wealth including assets is very complicated. something that looks at lifetime earned north carolina would not -- income would not be particularly complicated that. is already available to the social security and could be calculated. so it will depend very much on how it is done and how it is phased in. any of these changes are assumed to be phased in because it's unfair to change the rules drastically for people who are in to retire or very close to retirement. it is really signaling to people in the labor force that no
surprise to many of them, if you ask them their expectations that the entitlement as they have existed are going to change for them and the sooner question decide what the package looks like so they can plan their response the better off we'll be. it's really, again, if you assume no behavioral change, it doesn't look particularly attractive. it's about trying to put together a package of fiscal policies that begin changing the expectations that a number that was somewhat arbitrarily chosen in the late 19th century and remained pretty irrelevant through the starting of medicare as an age, is no longerrer relevant at all. and with every expectations that we'll continue to see increases in longevity long periods in
retirement as we now define it. >> i think it is worth adding to that that, you know, talking about medicare being based on lifetime income, i think ignores fact that medicare already is very heavily north carolina tested -- income tested. there's no income cap right now on the payroll tax cut >> but is for social security. you pay payroll tax based on all income. there's a income-related premium for part b. there's an income related premium for part d. you have portion of the social security tax goes to medicare. now there's additional tax on earned income above $250,000 that goes to medicare. medicare is heavily income-related program right now. and in fact, i can't imagine that people on the higher end are getting anywhere close back out of the medicare program to what they have been contributing over their lifetime. >> all right. we have someone at the
microphone. we ask you to identify yourself and keep your question as brief as you can can. >> yes, bob british medical journal. most has been about the impact on the federal budget and balancing one pocket versus another. what analysis has been done on say on the exchanges on the complicate of the employability of seniors if an employer has to carry these additional costs for an extended period of time? my high hypothesis would be may would make them less employable in some ways, either that or hasten the flight away from employers even providing insurance. on the consumer side how would these increase cost effect access to care and probably qlt of care? >> paul, you want to start? >> sure.
on your first question, i have actually not heard anyone or any of the studies suggest extending medicare eligibility age might hasten the point where employers might not have coverage at all. what i was trying to add earlier a majority outside of the industries where retire -- the effect of the age would be that at the margin there will be some employees that would continue in the work force longer because the subsidize they were seeing from the employer for health insurance would exceed the subsidize that would exceed if they got on the own for 00 exchange and indeed they might not qualify for one at all. ..
>> from our perspective, we know it costs the individual a couple thousands dollars more leading to the fact that some people will not be able to afford it ending up with hundreds of thousands of more uninsured at the ages of 65 and 66. we know what happens to people now who are 63, 64, who don't have health insurance. many of them, and we hear from them all the time saying they are hanging on until they get to medicare eligibility age hoping
they will not have a major event, don't get health care in that period, and we know what happens to people who don't have health care they need. they get on to the medicare program much sicker, costing the medicare program even morement i think it's pretty clear that when people have coverage, we can keep them healthier and save costs in the long run as well. we just saw the cbo do a study just this past month on the prescription drug benefit with a basically rescore the program as costing a lot less because it's -- they discovered that basically when people get the medication that they needed, the health care costs tended to be a lot lower, and so the score went down for the prescription drug benefit. i think you'll see same thing here, the more uninsured you get, the more costs are shifted off on to somewhere else, and people will be sicker, and therefore, the cost will be higher. >> that is the point now that you have the aca, that you can have this discussion in a way that was much harder to have
before. it's really to say for those who are able to continue working, can we begin to reorient the expectation for the next generation which is what we're talking about, recognizing that for people who are in that pre-medicare age, they will no longer have to postpone, taking care of health care because they, in fact, have an option. it is why this discussion takes on a whole different tone as a result of the affordable care act having been passed. >> i would say we have options, but we don't know if they are affordable options, and that's really the big difference. >> al miliken, am media. what can we learn from other countries. i wonder if you of you have studied the health benefit programs elsewhere, and do any have comparable insurance programs, and what's been the
experience in other nations? >> most of them struggle might ily with the promises they have -- mightily with the promises they have made encouraging people to retire even earlier than they do in the united states, and then finding themselves in very significant fiscal problems. france is the poster child of all, although maybe greece, i guess, would take number one. >> well, we do know that the u.s. spends a larger percentage of gdp on health care than any other nation by a fairly significant amount. tackling that underlying issue of what a percent of our economy is going to health care in general is really the key issue, and we should be focused on that, i think, much more than the federal government's portion of it, and in this case, we have a proposal that would actually increase health care going in the wrong direction. >> that is assuming that medicare spending equals medicare cost, and, again, as
somebody who actually ran the program, i'm not assuming that. >> you want to take that one? >> sure. >> david, this is definitely for you specifically and aarp. the question is this. what scoreble savings proposals does aarp support, medicare, beyond just better care coordination, does aarp support means testing, combining parts a and b cost sharing, or reforms or anything else? >> i think it's important to remind everybody that we recently had a large health care bill called the affordable care act which included $720 # billion of medicare savings, which i'm sure many of you hear plot -- throughout the year as both candidates talked about it. it's not that we have not cricketed a significant amount of savings already. we think we can do more in terms
of medicare to make the program more efficient, less wasteful, and focus on quality of care. there are a number of strategies around that. there's no silver bullets because they just don't apply to health care, but medicare in general, and it's about making the health care delivery system more efficient, and that means a better job of care coordination, a better job of transition between settings, a belter job of used evidence-basedded medicine and health information technology. certainly, going after waste and fraud can hep. we know there's waste and fraud in the medicare program, but these are all different strategies to make health care more first efficient and save my opposed to the conversation here today, which is how do we shift costs to another payer. we have to move away from that kind of a conversation and get to a conversation about how to lower overall health care costs, not just how to shift costs, and, in this case, shift costs and make the shift larger than the amount we're saving. >> okay. i've got a question here that
sort of tickles my bones because it channels my old boss, claude tepper. some employers value 50-plus-year-old workers, others have incentives to reduce the older work force or reduck tonight to higher workers 50 years and older. can you speak on the potential increase on the medicare ability age? >> as many of you know, there is an expectation of problems stemming from the baby boom generation and lower cohorts entering into the labor force in the future. it is why many thought potential for having workers being increasingly regarded as valuable which is highly likely and one of the questions raised
which is can the federal government begin to craft a set of fiscal policies to recognize the increased flexibility that many older workers want and try to make accommodations. because of how long i've been doing this, i'm finding it hard not to think this sounds hauntingly like the questions posed about whether or not employers would hire women during childbearing ages that came up in the 1970s and how would they make those accommodations, and both the additional demands for such labor force and working women to continue, women to work has made that now seem rather quaint and old-fashioned, and i suspect in the course of the next decade as we come out of our current
excess supply of workers and go back to a more normal period over -- older workers will be increasingly desirable, and workers will have a lot of reason to try to keep them in the labor force, especially if we can make it a bit easier for them. >> i think they -- we were certainly agree that we want to encourage people who can work to work longer, but i -- our observation at the current time is that employers demand for older workers, and there has been an uptake in the number of older workers over the last 20 years, but the demand is usually for higher skilled, tend to be better paid workers, who employers demand to keep or maintain in the work force, and not as much so for a lower skilled, lower paid workers, and an interesting point that goes along with that is if you look at increases in longevity, you see a dramatic difference between increases in longevity
between people who are higher income and lower income. the significant gains in longevity have been made among higher income individuals, and particularly, at the lower end, longevity gains in the last generation have been very flat. >> paul, you had a comment? >> i would just, you know, build on the comments from gil and david that i think we are seeing a shift for employers valuing older workers that's, you know, definitely been something that i have seen over the past 15-20 years too that there's more recognition of the importance of main taping talent for longer periods of time, and if anything, one of the things employers identified as a concern about the availability of subsidies, subsidized coverages in health insurance exchanges is it might encourage some of the workers do they want to remain in the work force longer to leave sooner than they might -- than they might
otherwise so i think that's just one of the realities, and i think as i started out with my comments, i think one of the really big contributions that the foundation did in general with their study of really being one of the first that starts to look at the whole world and ask questions of, you know, how does this analysis of public policy change once you factor in the enactment of the affordable care act and its implementation in 2014. >> okay. this is a question for julia. the keiser study estimates spending based on full medicaid coverage, everybody eligible for medicaid assumed 1 # 00% would -- 100% get coverage. there's questions on coverage and cost, but now we know the study is done, going on in the real world, what are likely
effects on coverage, and what are the more likely effects on medicaid costs? >> okay. so i'm going to broaden the question a little bit to talk about the effects for all coverage sources. we assumed, as i said, everybody who lost eligibility for medicare would take up another source of coverage, depending on their access to other sources such as employer coverage or their incomes which might qualify them for subsidies or medicaid coverage. first, let's take the question of the individual mandate and premium sup sigh di -- subsidies in the exchanges. there's questions raised about what happens if people 65 and 66 don't have medicare, can they qualify for these? there's no mention of a specific age for qualification, for subsidies for exchange coverage so presumably, if people didn't have access to medicare, they could, depending on income
qualify for whatever subsidies they were entitled to. it's a different story for the medicaid expansion. the aca specifically does limit eligibility for the new medicaid coverage to people under 65 so presumably there would need to be a statutory change if the medicare eligibility age was raised to 67 or higher. that provision would need to change to enable people to qualify for the medicaid expansion. in states that don't expand medicaid, those adults with incomes between 100% and 138% of poverty would be eligible for subsidies in the exchange, and they would be subject to the mandate, but for people with income below 100% of poverty in states that do not opt for the
medicaid expansion, they would not be eligible for medicaid or sub subsidies in the exchange because the law limits to those with people with incomes 100% above. however, having spoken to my colleagues about the issue who fosmed -- followed the issue more carefully than i have, they said secretary sebelius says these individuals would not be subject to any of the happen at a time -- mandate punishments if they lived here and fell into the coverage gap. >> would they be uninsured? >> presumably. >> the question wanted to know do we know how many people could potentially be uninsured? >> well, we don't really have an estimate since we didn't factor this, our analysis conducted prior to the supreme court's consideration of the case and the supreme court's decision, but i believe there was another
analysis done of the issue, i think, by the center for american progress? >> center for budget and american priorities maybe. >> i don't know which, but there's been recent analysis of the question looking at numbers, potentially for those individuals who are living in states that have expressed a lack of interest in expanding their medicaid programs. >> okay. so while i have you at the microphone. there's a few other technical questions. one is we assumed 100% federal payments on medicaid. >> that's right. >> because it was implemented in 2014, and some have pointed out that there would be effects for states. can you explain that? >> well, the state contribution for the new medicaid expansion is initially zero. the 100% federal share is until 2017, i believe, and then it phases down to 90% over the next few years, and so states would pick up a slightly smaller -- i mean, the effects we found were net spending increase for states
of $0.7 billion, not a huge number, at least in the year of our analysis, but there would be a slightly -- that would be a slightly larger number in the later years of the proposal. >> one more? >> yeah, yeah, go ahead. >>ing -- okay. one more for you and we'll spread it out. why are the numbers larger for you than the congressional budget office? >> yeah, so they raised the age of eligibility and also began implementation of a higher eligibility age in 2014; however, they modeled the phase-in approach, and what we're more likely to see. their analysis was over a ten-year budget window, and ours was just in sang -- single year of full implementation. there was assumptions made this terms of they assumed that 5% of the total population of 65 and
66 #-year-olds would go without insurance, where we assumed 100% coverage, and there are other technical differences than assumptions, but i think the largest one is the fact that they were looking over a longer period of time and phasing in the proposal. >> okay. >> weave got a -- we've got a question here, excuse me, a search that several of the speakers used, average amounts in making calculations, but that significant difference are evident once you analyze different income groups, and although this questioner asks the question, i think we'd be interested in hearing from other panelists as well. since those below median income
below the average, what if the policy focused only on those in upper income? that's actually a question that's been raised, for example, by senator durbin, how he might be willing to consider a change in eligibility age if there was some way of protecting low income people. i'd be interested in hearing how folks believe we ought to deal with that. >> look, a couple responses. one, medicare and social security is based on the fact they are social insurance programs that everybody pays into and everybody gets out of it. now, obviously, i mentioned earlier about how the medicare program, itself, is already very heavily income-related, and there are different income features throughout the medicare program, and certain people, for example, have premiums paid for through medicaid, if you're -- when the part d program, the
lower third of the income, you basically have more of your drug costs taken care of, for example, a lot of people in the room probably don't know for those people there's no donut hole because all part d coverage is taken care of. those 65-year-olds may lose all the coverage should they not be eligible for medicare. there's already a number of income adjusted features to the program, and, of course, there's differences as we've just heard if there's medicaid expansion in some states and not in others, there's a lot more up insured in the states because the folks will not be able to afford insurances. there's a mixed bag of impact here, and we already do have a fair amount of income relatedness in the medicare program. >> one point on this. the fair point, talking about averages, and we did look at the different income groups in the analysis, you know, granted, you know, there's a large span of
income when you look at # 00% or -- 300% or 400%, or 200%, and it's a large group, relatively small share of the medicare population, but for those of you interested in looking at averages for specific income groups, i didn't present them in the slides because i had a lot of material to present already in the 10 minutes that i was allotted, but we do cover the different out of pocket changes in terms of premiums people would have paid under medicare and costs they would have paid under medicare, and their expected costing sharing and premium obligations in the coverage, and all the results are described in more detail in the report that is held up for display at the beginning of our session. >> may i say these are some of the best questions coming from the add innocence that we've had
in a long time. thank you. >> this speaks for protections against the low income population, and has the option. discussed to modify the discussion of poverty level to help seniors, lower income seniors if the age is increased in order to allow more options, and cost sharing options talked about, are there options talked about to provide greater protections to those with modest incomes? >> again, there's some for a lower income, but you are dealing with a population that even modest income folks are really between $30,000 and $30,000 with a lot of heavy costs to go out and buy insurance in the private market
or through the exchanges, and it's going to be quite a chank of money, and you can adopt policies for the lowest income, and there's policies in place that do that within medicaid or medicare or pushing people boo medicaid or giving people greater subsidies, change age rating, for example, rather than 3-to-1 #, have it 1-to-1 to help seniors afford health insurance. of course, there's things you can do, but these things are obviously going to cost more money. they are going to shift the costs somewhere else. >> i think, now that i look at it, the questioner might have been getting at something else which is when people, once the health reform law is implemented, there's going to be fairly generous eligibility and income standards that are for the pre-65 population and the medicare population for supplemental coverage.
there's not an as sees test to medicaid, for example, for people younger than age 65. what's the questioner's getting at is is there an effort to ease that -- prevent that cliff from occurring in the context of some of these discussions. i think the answer is know by the way. >> the answer is no, and, of course, you can spend more money to ease the cost on whatever group affected, and that, obviously, is just additional money to come up with to try to deal with the problems you are creating. >> in the same vain, this one actually harkens back to an earlier era as well, and the idea is that this is another policy proposal from one of you in the audience which is to allow a buy-in by those age 65 and 66 to the medicare program if, and as the age is raised, for full eligibility, and it
harkens back to a proposal in the clinton health reform era of allowing people as young as 60 or maybe even 55 at one point to buy in at the full actuary cost of the program. any reaction to that by any of the panelists? >> makes much less sense begin the passage of the affordable care act. eng -- i think the issue that had been dealt with previously is that because there are individuals who, for whatever reasons, no longer have other sources of insurance coverage in their pre-medicare years, would it be okay to let them buy in on an unsubsidized basis to the medicare pool, but we don't need to do that now because you have the affordable care act which will make insurance via medicaid or the exchanges available to
people in the group setting, and so it doesn't -- i mean, you could think about technically doing it, but it doesn't make a lot of sense. >> okay. >> i would totally agree, and my first reaction, too, is that such a proposal in today's context would actually make those individuals worse offer unless you also, you know, brought over to the medicare program the same set of subsidies that would be available to those individuals through the exchange. >> which is where the question was going so if you bring over those same level of subsidies to an insurance product, which is lower in cost, to the point brought up earlier about cost shifting to something that system wide costs more, but is less to the federal government just by taking them off, what if you offered a buy-in to medicare for the 65 and 66-year-olds with a same access to subsidies through the hie? >> that would, again, you are assuming that it is actually
cheaper, and let me say, again, real clearly, what we know is that medicare providers will be paid less, $716 billion less over ten years as a result of the affordable care act. that is not the same as saying that medicare is cheaper. there are various estimates which you can accept or not as to the kinds of cost shifting that goes on into the private sector. there's almost nothing in the affordable care act that actually lowers the cost of health care. there are a number of promising innovations that are going to be tried or that are in the process of being started by the center for medicare and medicaid innovations. there are a lot of innovations being tried in the private sector that may end up actually lowering the cost of health care. most of the components in the affordable care act to date and those that are anticipated in
the next couple of years will actually increase the cost of care because of the expansions that have occurred in terms of coverage and insurance reforms, and because of the various taxes that have been tacked on, such as insurance premium tax, the new fee announced for insurers who will be entering into exchanges, the medical device tax, those are all going to be passed on to the users. now, that doesn't mean there aren't enormous potentials for figuring out how to provide care, and more officially in the future, but we have nothing now that should lead us to expect that that's what's going to happen. if we're luggie and figure -- lucky and figure out what works and then figure out if it's scalable and then figure out how
to make it a part of the medicare program, that could all change, but to date, the lower payments that are estimated for medicare over the course of the decade reflect lower payments to the providers of services, not lower costs of providing those services to medicare beneficiaries. it's a really important difference. >> is it fair to say, or did i understand -- correct me what you were saying, to be that there really isn't a cost lowering strategy available now? >> the only small items that are actually in the legislation are the ones that come to mind, the accountable care organizations, which are a shared savings mechanism. interesting, we'll see whether or not they are actually a transitional model to something else, and how many participate,
but nobody expects large savings from the aco's purr say, and initially to hospitals and nursing homes, and ultimately, the physicians, if we figure out how to get the box, and, again, $300 billion of quote-on-quote, savings, as people regard as more than other such types of savings. if you actually look, other than the value based purchasing which i support, but it is at the very edge of the tail that we're talking about in terms of change and the affordable care organizations, the process for learning how to get out of the dysfunctional incentives of medicare as we now know it, which is you get more services
tied up with the pilots. we all hope that we learn something, and that there are changes that we can figure out how to introduce, but we're not there yet, and there are a lot of ifs that have to happen so i applaud the affordable care act for substantially expanding coverage. that was very important. the hard stuff is yet to come. we have not figured out how to do that so as i look at the legislation, there is preshesz little that lowers spending, and there's some things that increase costs because of the way it was financed. >> i guess i would just comment that throwing 65 or 66-year-olds into the market doesn't ill prove efficiency or lower costs either. >> i know, what i have said is it is part and parcel in attempt to get people to understand that the con cement -- concept