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MELISSA BLOCK, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.

ROBERT SIEGEL, host:

I'm Robert Siegel.

And we start with the health-care debate that rages on, even through the dog days of August. Moderate Democrats in the Senate, epitomized by North Dakota's Kent Conrad, who was on this program yesterday, say that for a bill to pass in their chamber, it cannot include a government-run public insurance plan.

Senator KENT CONRAD (Democrat, North Dakota): The hard reality is there are not the votes in the United States Senate for public option, never has been.

SIEGEL: But liberal Democrats in the House say that for a health-care bill to win passage in their chamber, it must have a public option. Some 60 members support a letter to Health and Human Services Secretary Kathleen Sebelius, saying as much. And one of those members is Democratic congressman Raul Grijalva of Arizona who joins us now from Yuma. Welcome to the program.

Representative RAUL GRIJALVA (Democrat, Arizona): Thank you very much, Robert.

SIEGEL: And why is a public option so essential to health care that you would threaten to vote against a bill without one?

Rep. GRIJALVA: It's the toehold, quite honestly. In this process, most of us who are signatories on that letter, we're single-payer proponents. That is not part of the agenda right now. And we felt that we had to have - and for health-care reform to effectively work, you needed a public option - with Medicare as its provider network - that would be able to compete in the free marketplace with the private insurance companies, and in that way, begin to control cost and provide the consumer a better deal and to give businesses and individuals an option, a choice. Without it, we basically have the system we have now, with some reductions of 80 billion in the long-term off of future profits for pharmaceuticals and no indication for private insurance - what they're going to contribute.

SIEGEL: This is what was written in today's politico.com, and I quote: The White House is clearly betting that liberals simply won't walk away from a health-reform bill that achieves most of what Democrats want, such as expanded coverage, affordability, and limits on some insurance company practices. Is the White House right about that?

Rep. GRIJALVA: I think the White House is misreading the sentiment, not just of the members of the Progressive Caucus, but many members of Congress. And I can name a few that are not part of the caucus as adamant about the public insurance plan. We see this as one of the critical reform pieces - that many of us have run for office on the concept that we're going to control costs, we're going to get the private insurance companies under control, and we're going to provide a Medicare-like program for the American people.

SIEGEL: And without such a program, could you actually see voting against a health-care reform bill and not having a bill?

Rep. GRIJALVA: Having - replicating what we have now to the tune of an extra trillion dollars without a public option, yes, I could see myself opposing that.

SIEGEL: How do you answer the political reasoning that the districts that you and other members of your Progressive Caucus represent are going to elect Democrats even if unemployment reaches 15 percent, the market crashes, and there's no health-care bill at all - but for the Democrats to be a majority party, you have to elect candidates from Arkansas and rural North Carolina, and places where there's real skepticism about a big, government health-insurance plan?

Rep. GRIJALVA: Well, I think that the premise being that some of us are in safe districts and therefore can have this opinion, and in other districts you need to be careful. I think being careful is what's got us in the situation. I think we should've drawn the line in the sand earlier with the White House and our congressional leadership about what important the public option was, not negotiate that away so early that now we find ourselves struggling to keep it in. And I think the American people are realizing that the cost of health care is beyond their control. And if there is a mechanism like a public option that will begin to control that cost, they are going to support it.

You know, this crosses demographics. Health care costs us one out of every $5 of every American regardless of a safe district, a blue district, a red district. And I think that's what's going to resonate. And right now, I'm glad we're in this debate because it gives us an opportunity to make those clarifications. And I think early on, underestimating our opposition, we kept quiet.

SIEGEL: Congressman Raul Grijalva of Arizona, thank you very much for talking with us.

Rep. GRIJALVA: Thank you very much.

SIEGEL: Over the past few weeks, we've heard here from some of the different interest groups that figure in the health-care debate: the AMA, the American Hospital Association. And today, Karen Ignagni joins us. She's president and CEO of America's Health Insurance Plans, which represents some of the biggest health insurers in the country, including Aetna, WellPoint, Cigna, UnitedHealth Group and others. Welcome to the program.

Ms. KAREN IGNAGNI (President and CEO, America's Health Insurance Plans): Thank you very much.

SIEGEL: I'd like to start by reading to you what New York Times columnist Bob Herbert writes this morning. He writes: Insurance companies are delighted with the way reform, which he puts in quotes, is unfolding. The government is planning to require most uninsured Americans to buy health coverage. And he writes that the goldmine that your members stand to get by way of that mandate will more than offset the cost of new regulations, such as no lifetime limits on benefits. A fair assessment?

Ms. IGNAGNI: Well, the individual mandate is key to making the whole system work. Massachusetts is a classic example. They tried twice. The second time, they went with the mandate because of the deleterious experience the first time around of trying to do it without it.

SIEGEL: And it checks out: The mandate, the idea of all of those people paying in, can pay for the larger risks that the insurers assume under the reforms we're hearing about without increasing anyone's rates.

Ms. IGNAGNI: It's not that the insurers are assuming the risk, it's that the population then is co-dependent, if you will.

So right now, we have a system where people are subsidizing folks who do not participate. We're talking about an individual market which has roughly 18 million people in it - may grow by another five to 10, depending upon how the bills are structured. So those - that's the universe that we're talking about here for these rules. Otherwise, the rules exist of guarantee issue in the employer market the way they have worked for years.

SIEGEL: Right. You're saying my premiums today - I'm insured, my premiums, one reason they're as high as they are is that there are other people who don't have any insurance...

Ms. IGNAGNI: Yes, I can...

SIEGEL: And I'm covering their bills.

Ms. IGNAGNI: I can give you the numbers.

SIEGEL: Right.

Ms. IGNAGNI: Two factors: One, that for people who are uncompensated, they enter through the doors of the emergency room, the cost-shifting is $1,000 per family; Families USA just did a study. Two, the cost-shifting because of the underfunding of Medicare and Medicaid, that's $1,500 per family. So to start, we start with $2,500 surcharge.

SIEGEL: Are you confident that that family that's going to the emergency room for lack of health insurance actually can afford the policies that your members will offer?

Ms. IGNAGNI: Well, this is a very good question, which is why so many members of Congress, on a bipartisan basis, have committed to providing a helping hand to working families to help make sure they can afford coverage...

SIEGEL: But...

Ms. IGNAGNI: ...in addition to the expanding of the safety net.

SIEGEL: That would be a subsidy not just of the family that gets the helping hand but of your insurance company that would receive that money.

Ms. IGNAGNI: I - this is a subsidy for people who are not in the system today, many individuals who have relatively low incomes, to help them be able to afford coverage.

SIEGEL: Your industry is opposed to a public option, what we call a public option. But Medicare and Medicaid have already put the poorest and the sickest Americans on public insurance. Why not let the public insurance system in on the part of the health-insurance market that's actually competitive: healthy, working Americans?

Ms. IGNAGNI: Well, it's a reasonable question. Let me give you a reasonable answer. Right now, Medicaid is paying 65 cents on the dollar. For Medicare, it pays 85 cents on a dollar. The way the Medicare and Medicaid programs are sustained because they pay - underpay physicians in hospitals is those physicians and hospitals charge the private sector more.

SIEGEL: But I'm listening to this and I'm thinking, well, if your members drove the same kind of hard bargain that Medicare and Medicaid drove, then perhaps you could force down the costs that the hospitals and the doctors are charging.

Ms. IGNAGNI: But I think people have confused, in this debate, the issue of underpayment with cost-containment. And they're not the same thing.

SIEGEL: Now, your argument against the public option is that as federal programs exist today, they shift costs. The alternative idea is a system of co-ops throughout the country. Presumably, they wouldn't have the force of the Department of Health and Human Services behind them; they couldn't set laws that would cite reimbursements. Are you opposed to co-ops?

Ms. IGNAGNI: Well, I don't think there's anything to see yet. The government has no ability to create entities that will negotiate with providers. So we are concerned that the same issues that, not only we have identified but the hospital and the physicians have identified, will exist in the co-op models.

SIEGEL: Concerned, in politic-speak, is a negative word. I mean, you are concerned about the subject, the co-ops.

Ms. IGNAGNI: It's a straightforward word.

SIEGEL: Well, Karen Ignagni, thanks very much for being straightforward with us.

Ms. IGNAGNI: Thank you very much.

SIEGEL: Karen Ignagni, who is president and CEO of America's Health Insurance Plans.

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