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Mike Pence: Remarks by the Vice President in a Listening Session with Small Business Owners at Tendon Manufacturing in Cleveland, Ohio
Mike
Mike Pence
Remarks by the Vice President in a Listening Session with Small Business Owners at Tendon Manufacturing in Cleveland, Ohio
June 28, 2017
The White House: Office of the Press Secretary
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THE VICE PRESIDENT: First of all, thank you all. Thanks for joining us today. Thanks for taking time out of your busy lives. I want to thank Mike Gordon and everyone at Tendon Manufacturing for hosting us today. Looking forward to visiting with folks and making more formal remarks in a bit.

But what the President and I have tried to do as we travel around the country is listen as much as we talk. And we are very close to achieving a signature goal of this administration, which is to repeal and replace Obamacare and give the American people not only relief from those disastrous policies, but give the American people and American businesses the kind of healthcare reform that will lower the cost of health insurance and while we give states all new flexibility to provide for the most vulnerable in our communities.

So I'd be anxious if you'd be willing to share, and we'll invite the media to stick around. Share your experiences with Obamacare. How important would it be for us to have the Congress pass legislation to repeal and replace Obamacare? How much of a burden has Obamacare placed on your businesses and your families? But I'd really welcome you to share for a couple minutes your own experience. We'll take 15 or 20 minutes here. And again, thank you so much for being here. But who wants to speak up.

A PARTICIPANT: I start out (inaudible).

THE VICE PRESIDENT: And share with us your name and who you're with.

A PARTICIPANT: My name is Jack Shrom (ph). I'm with Jurgens Incorporated (ph). We're a manufacturing company here in Cleveland, Ohio, ship all over the world.

And the burdens that have come in all the administrative requirements that have been dropped on top of small manufacturers and medium-sized manufacturers.

Right now it takes over 40 hours just to do the administrative paperwork to do the form filing and the 1095cs out there. Not only that, then we have to send it out to outside accountants that have to then formalize that, and we have outside attorney, accounting fees to (inaudible) documentation.

THE VICE PRESIDENT: How many employees do you have?

A PARTICIPANT: We have about 450 employees worldwide, here in Cleveland and Chicago. And we export throughout the world, and we're a manufacturer. We're making stuff here. And if we can get rid of some of those burdens, I know it has a direct correlation to hiring.

THE VICE PRESIDENT: So the administrative requirements that put a tremendous financial burden --

A PARTICIPANT: And it does nothing. It does absolutely nothing other than add to our cost of doing building, which adds nothing to putting product in the box, hiring a new person, doing anything that we can to increase jobs.

THE VICE PRESIDENT: Thank you. Other thoughts on how impossible it would be to repeal and replace Obamacare. Share your name and who you're with.

A PARTICIPANT: (Inaudible) in 2014, we had 37 employees. I get to work with 36 great people every day. And I had to make the decision that we were no longer going to offer health insurance. So we had meetings. I brought in our insurance person and let them meet one and one.

And then somebody in the administration, I don't know who that was, said, okay, because there was no small business market, we will allow you to continue to offer a noncompliant plan. And so every year we wait and hope that they will allow us to continue offer a noncompliant plan. And every year they have.

These 36 people get up and go to work every day. They deserve better than that. They deserve some certainty. They deserve to know there's a market in place. And I have no problem with helping the less fortunate. Neither does our people. But these people need some consideration, as well.

About a third -- a small business study. About a third of small businesses are not hiring due to Obamacare. About half of small businesses have delayed pay raises due to Obamacare.

Now we wonder what's happened to our middle class. They've been left behind because this legislation was about expanding coverage and not anything to do with retaining cost. And the reality is we need something to bring the cost of coverage down.

THE VICE PRESIDENT: And have you seen your premiums rise? You've had --

A PARTICIPANT: We saw even with a noncompliant plan --

THE VICE PRESIDENT: You've gotten those one-year waivers --

A PARTICIPANT: Well, with the noncompliant plan in 2015, our average cost for employee went up 24.1 percent.

A PARTICIPANT: Your health insurance did?

A PARTICIPANT: Yes.

THE VICE PRESIDENT: 2015 it went up 24 percent?

A PARTICIPANT: Yes. It then went up 7 percent and 7 percent the last two years -- primarily because our average tenure was 22 years, and we have employees that are now retiring.

THE VICE PRESIDENT: Let me ask you -- you make a great point. I don't know. You said that you believe that third of businesses are putting off hiring -- a third of small businesses are putting off hiring.

A PARTICIPANT: Yes, there was a study -- a small business study was done.

THE VICE PRESIDENT: By whom?

A PARTICIPANT: The National Small Business Association.

THE VICE PRESIDENT: Okay, and a half of those small businesses in that study have delayed pay raises because of the cost of health insurance in the wake of Obamacare. I literally hear this everywhere I go is the administrative burden, rising premiums, and frankly the quality of the coverage going down.

I was with a group of families in Washington this week, came in from around the country, a few from Ohio, talked to me about the fact that they were paying $4,000 a year for a policy that had a $12,000 deductible, so it was essentially meaningless.

Several people at the table faced with the same choice simply decided -- as 6.5 million Americans have -- to simply pay the fine because they concluded that whatever insurance they'd be paying for would effectively not give them coverage.

Your thoughts.

A PARTICIPANT: Well, Mr. Vice President, my husband and I we own a wonderful restaurant in Rocky River.

THE VICE PRESIDENT: How many employees in your restaurant?

A PARTICIPANT: Well, originally we had 58. A lot of them were full-time because we had move from one building to another. Because of Obamacare, we felt so bad because a lot of these people were with us for like -- almost 25 years. They were with us (inaudible). And we just couldn't afford to keep them.

So our biggest thing we had to lay off a lot of wonderful people because they wanted full-time, and we couldn't afford it. So we had to go into the part-time.

So today the 58 have turned into 72 employees because of part-time.

A PARTICIPANT: Is everybody part-time?

A PARTICIPANT: A lot of them are, but I had to stay under 50 so I couldn't -- that was basically what we did -- 29 and 49. Everybody told us --

THE VICE PRESIDENT: So you went from 58 full-time employees.

A PARTICIPANT: They were all -- a lot them were. I had almost 50 full-time.

THE VICE PRESIDENT: Almost 50 full-time, but then to avoid Obamacare you said I have to take my payroll --

A PARTICIPANT: I have to take my full-timers and go down. Otherwise we wouldn't stay in business, Mr. Vice President. It was just the end. Our profit margin is so low, we just couldn't.

THE VICE PRESIDENT: Right. But do you want to provide health insurance to your employees at the restaurant?

A PARTICIPANT: No, Mr. Vice President, we have tried in the past. And I offered it to the employees where they would pay 50 percent, we would pay 50 percent. They didn't want it. They said, please give us the money. They'd rather take the money.

THE VICE PRESIDENT: Yeah, sure.

PARTICIPANT: So I would love to. You know, they're wonderful -- employees aren't employees. They become like your family.

THE VICE PRESIDENT: You'd love to offer coverage.

PARTICIPANT: I would love to offer coverage.

THE VICE PRESIDENT: And then people can decide whether they want to have it.

PARTICIPANT: If they want it or not.

THE VICE PRESIDENT: Well, one of the provisions of the Republican legislation that's advancing is called association health plans which, in the case of the restaurant association -- see, a major corporation that does business nationwide can have a nationwide insurance pool for their employees. But a local entrepreneur owning a restaurant or a local manufacturer --

PARTICIPANT: We can't.

PARTICIPANT: We can't do it.

THE VICE PRESIDENT: But association health plans would permit you, because the President's great conviction about healthcare is that, if you give people the ability to buy health insurance across state lines or in associations or however they'd like to buy it -- and if you allow states to reform Medicaid so that it meets the unique needs of the people of Cleveland and the people of Ohio, the people of Indiana, in my state, that that goes a long way toward the kind of healthcare reform and results that the American people long for.

But it would give you and your company choices, and your employees choices that they just don't have today. But it's literally cost full-time jobs.

Claudia.

A PARTICIPANT: I'm Claudia Kovach (ph), City Machine Technologies (ph) in Youngstown. Healthcare is our biggest single expense. I spend $1,700 every day before I even turn on the lights on healthcare. For the last eight years, we're not getting any more for our money, prices are increasing, and the healthcare benefits are decreasing. I have higher copays. I have higher prescription drug costs. I have higher deductibles, higher premiums for our employees, and our employees are struggling to pay those.

THE VICE PRESIDENT: How many employees do you have, about?

A PARTICIPANT: Sixty-five employees, and with insurance, CMT pays 80 percent of the premium, and our employees pay 20 percent. And our deductibles are great. We've always had a PPO, and then the last three years, we started with an HSA and a health savings account. And I really support the health savings accounts because I feel that you're a better healthcare consumer. But I have an HSA and we have a $2,600 deductible, and out of pocket is $3,500. We've had people with cancer and heavy medical issues, and if you're on the HSA, all you pay is $3,500 for your cancer treatment.

THE VICE PRESIDENT: When I was governor of the state of Indiana, we introduced health savings accounts into Medicaid. We already had health savings accounts for almost all of our 30,000 state employees. And all the great progress that you see in wellness and in the lowering the cost of healthcare around the country is --

PARTICIPANT: It makes you think.

THE VICE PRESIDENT: -- consumer-directed healthcare. When you put people in charge of their own healthcare choices --

PARTICIPANT: You make better choices and cheaper choices. You're more cost-effective.

THE VICE PRESIDENT: You make better choices and more cost-effective. Well said, I appreciate it very much.

But prices going up, benefits going down, that is the unbroken record of Obamacare -- premiums going up, benefits going down, which is the exact opposite of what we were promised.

Karen, please.

A PARTICIPANT: Well, I would like to ask if you are still going to have the Cadillac tax because that really doesn't make sense to me that the government should be penalizing somebody for offering the healthcare benefit that they want to. So we would have to pay the Cadillac tax.

THE VICE PRESIDENT: Tell me about your company.

A PARTICIPANT: So we have about 1,400 full-time employees.

A PARTICIPANT: How many?

A PARTICIPANT: Fourteen hundred. And it's a manufacturing company -- so our healthcare insurance is very expensive, and we also offer wellness care and so on. And we charge our employees very little because we consider it part of their employment package.

But because the costs have gone up so significantly over the last eight, 10 years, that's less in your pocket and more that just has to go toward this ever-escalating cost.

And I was talking to my (inaudible) today, and he was telling me that one of the significant things about the way the system works is that all of the providers do this high-pressure thing to -- where they say, well, you can pay now. You can pay now. How much are you going to pay? Are you going to pay me now?

And so in effect, they're getting your money, then they're going to give you a credit later on? Then that's not right. The entire system is so opaque because nobody knows what anything costs. They think it costs $20 to go to the doctor because that's their copay. But in reality, it costs $100. And I would like to see there be two things: one, insurance which is like car insurance, you have healthcare insurance. I like healthcare savings account. It's a great idea, and the association thing. That's the other one.

THE VICE PRESIDENT: Association healthcare.

A PARTICIPANT: Excellent idea. And then wellness, which is the healthcare benefits like dentist, vision, doctor checkups, all of those things -- there should be a separate item from insurance because insurance should be for catastrophic or out-of-the-ordinary. And healthcare benefits should be a (inaudible) but we're not separating those out.

A PARTICIPANT: It used to be called hospitalization back in the day. (Inaudible) but now it's all one big mess.

THE VICE PRESIDENT: So how important to repeal Obamacare --

A PARTICIPANT: Absolutely essential. It's absolutely essentially. It's such a (inaudible) to the system. No one knows what it costs. No one knows how to work. It's completely opaque, and it's extremely expensive. So I don't think you could find anybody that would say (inaudible) or that it made costs go down.

THE VICE PRESIDENT: And they did call it the Affordable Care Act. (Laughter.)

A PARTICIPANT: Right, I think (inaudible) the name.

THE VICE PRESIDENT: I think that's what -- it would be funny if it didn't play such a hardship on the American people.

A PARTICIPANT: Today we had a cookout, and all the management team makes hamburgers and hot dogs for all of our workforce. And I asked the one question that was the most concerning for them today. And it's their healthcare under what's going to happen. It's an anxiety that's (inaudible) through every single employees' eyes, I could see -- we had probably 150 at lunch today. And every person's eyes were scared for their children, their grandchildren, for everybody in regards because it's so uncertain. We need to get this thing fixed. Fix it right.

THE VICE PRESIDENT: And don't you think, Jack and Karen (ph), I think the American people know that Obamacare has failed.

A PARTICIPANT: Yes.

A PARTICIPANT: They do. That's the uncertainty that you see in their eyes -- what's going to happen to my children and grandchildren.

THE VICE PRESIDENT: Yes, that it's collapsing, and that political class in Washington, D.C. and many in the national media continue to want to gloss over what -- virtually every day there's another insurance company that falls out of these exchanges.

Ohio has had its news in recent days, leaving many people in the state without effectively any choice in health insurance. That's why we're working so hard to get this done.

A PARTICIPANT: Yes, you got to this done. But you know all the press (inaudible) -- and every hospital has to raise money, has to account for that. They have as a big part of their budget.

THE VICE PRESIDENT: It's called charity care.

A PARTICIPANT: Yes, exactly. And so it's not true to say that all of these people will now die because they can't get healthcare. They will get healthcare.

THE VICE PRESIDENT: But we truly believe that you can make health insurance affordable by giving the American people more choices in health insurance, and by inviting greater competition. Your point about transparency is a great one.

A PARTICIPANT: So you can shop.

THE VICE PRESIDENT: Allowing people with health savings accounts and other innovative methods to be able to become consumers of healthcare, have information to make better choices in in their healthcare.

And with regard to Medicaid, I will tell you before I had this job I was governor of your neighbor to the west. And in the state of Indiana, we also expanded Medicaid. But we did it with what was the most significant waiver in the history of Medicaid. We actually had people be able to have health savings accounts in Medicaid, and people took advantage of it. We're already seeing in Indiana people moving from using their emergency room to use primary care. We're getting. They're going to the doctor on an annual basis, engaging in wellness. It's actually very exciting when you empower people (inaudible) the ability to make their own healthcare choices.

And when people lead healthier lives, they lead more productive lives. And it's a wonderful things, but this one-size-fits-all-Washington (inaudible) solution --

A PARTICIPANT: Doesn't work (inaudible) --

THE VICE PRESIDENT: -- is literally collapsing in terms of the individual marketplace. And with regard to Medicaid, my heart broke this week. I had the mother of a special needs child who is kind of a miracle boy. He looked to be about 21 years old. She was from Illinois, and she said Illinois expanded Medicaid and the net result was that Illinois Medicaid reduced the coverage of her special needs child. Because once you expand your Medicaid program in the way that it's been expanded in many states, there's still scarce resources.

And it was just heartbreaking because Medicaid was literally established to provide what we've American would want to see provided for the aged, the blind, the disabled, the vulnerable -- children, and yet now --

A PARTICIPANT: (Inaudible) statistic -- whether it was in the papers, it said 49 percent of all live births are (inaudible) Medicaid.

THE VICE PRESIDENT: There are jurisdictions around the country, states around the country where that's actually true. And that's fine. That's fine.

A PARTICIPANT: That's an incredible statistic.

THE VICE PRESIDENT: Yes, the American people -- I truly do -- the President and I truly do believe that it's enormously impossible to be there for people with a vulnerable need.

But we believe by giving states like Ohio the ability to reform Medicaid so it can better focus -- it can provide better services and then better focus on the most needy in the communities, it's possible.

I talked to a woman from here in Ohio this week. I may mention here in my speech where literally I had tears in our eyes at forum just like this in which she said she paid the $4,000 a year for an Obamacare card. It's in her pocket. No doctor, no hospital, no clinic in her county here in Ohio takes the insurance that she was required to buy.

A PARTICIPANT: Twenty counties just pulled out in Ohio.

A PARTICIPANT: I went on the website. I'm 36. I'm healthy. The premiums for a catastrophic plan -- $10,000 deductible -- were more than my mortgage.

THE VICE PRESIDENT: Right. I heard that from another person.

A PARTICIPANT: I'm lucky to have employer-sponsored healthcare, but I'm just curious.

THE VICE PRESIDENT: You just went and you looked. I'm 36. I'm healthy. The premium on the policy -- if you didn't have it through your employer, you would be required to purchase.

A PARTICIPANT: Yes, it was more than my mortgage payment.

THE VICE PRESIDENT: It was more than your mortgage. Obamacare.

A PARTICIPANT: I'm Michael Canty (ph). I have a manufacturing company (inaudible) about 130 employees. After a lot of what you've just heard, higher administration costs, both outsourced -- because we don't have the expertise -- and insourced --

THE VICE PRESIDENT: How much is that costing you in the outsource without compromising your --

A PARTICIPANT: We spend probably $12,000 to $20,000 a year just to outsource. That doesn't include the soft costs, the hourly costs for the various people in in-house who would have to track that, fill out the forms, the extra fees we pay on a per-head basis.

THE VICE PRESIDENT: So what would that be, your internal HR?

A PARTICIPANT: We probably spend another $10,000 -- $12,000 for a small company.

And the key to that along with some of the other costs we spend is that it takes capacity away from the manufacturer, away from the company. That's money they don't spend hiring people, buying equipment, building value which benefits everyone.

Our overall costs for healthcare insurance, we provide that, plus dental, plus eyes, have almost doubled. Tom and I were comparing earlier his healthcare in 2015 went up 24 percent. Our quote for 2014 was 46 percent. We negotiated it down to 24 percent, then it went to 8 percent. And this year it was 16 percent. We negotiated it down with only the promise that we would renegotiate next year, and we pay 9.5 percent guaranteed next year for the same plan irrespective of what took place.

And those costs are not just by the association -- or by the companies. Our employees, like many, cover 30 percent. And we just keep that percentage.

So they not only have that cost going up, but the deductibles. We used to have $500 and $1000 deductibles six years. We now have $6,000 -- or $3,000 and $6,000 deductible. So as you've already heard some people can't use it even if they had it, and they get a double hit with what's taking place.

And the younger people won't do it. Only about a third of our company, which are mostly young, won't take insurance at all because they don't want to pay for it or they don't think they need some of the benefits that are mandated. They just want a catastrophic plan. And so they go without.

THE VICE PRESIDENT: (Inaudible.) It's really helpful. Thank you.

PARTICIPANT: We really need to pass this through the Senate. It needs to get done. And I know you're working -- you and the President are working hard on that.

(Inaudible.)

THE VICE PRESIDENT: Yes. It's in the bill.

PARTICIPANT: (Inaudible.) The more local it is, the more state it is --

THE VICE PRESIDENT: Look, every state has unique challenges. In Indiana and Ohio, you know, the scourge of opioid abuse is very real. You know, it affects communities large and small. There are states in this country where there are different challenges, different health challenges. And you're absolutely right. I -- of course, I bring the bias of having been a governor. But it is a centerpiece of this reform that states gain all-new flexibility. I mean, giving your governor here in Ohio the ability, in your legislature to redesign Medicaid in ways that will best meet the needs of people in Ohio. That's part of the President's vision for healthcare reform by creating a marketplace where we lower the cost of healthcare, which was part of one of the broken promises of Obamacare. They said it would lower premiums by several thousand dollars. And now premiums have gone up by more than $3,000 a year last I had checked.

How about -- why don't you give us one word, and then we'll run off to this next thing.

A PARTICIPANT: So I'm Vince Costello (ph) with Diversified Mold and Casting (ph). We're a small manufacturer here in Warrensville Heights. We have 48 employees currently, and (inaudible.)

When the ACA was passed, we did see costs go up significantly. Administrative costs, (inaudible) mention, we not only at the time spent, but the minimum 5 percent for costs just in administrative fees. We still (inaudible.)

THE VICE PRESIDENT: Did the premiums go up?

A PARTICIPANT: Absolutely -- 23 percent annually.

THE VICE PRESIDENT: Twenty-three percent annually since Obamacare was passed.

A PARTICIPANT: (Inaudible) negotiated those down at times, as Michael mentioned. We've also gone through (inaudible) 60 percent out of our employees' out-of-pocket expenses. That's the only way I can get it affordable for them. They've (inaudible) premiums, and they obviously (inaudible) for a reason. (Inaudible.)

It's huge. People don't know what's coming. They didn't know it was coming with Obamacare. It happened. And those people still don't truly understand it.

PARTICIPANT: Mr. Vice President, if I could just ask one question --

THE VICE PRESIDENT: I'm sorry.

PARTICIPANT: -- as it relates to the healthcare plan. Because one of the things that always concerns me, and I think it's something that all these manufacturers at the table think about -- you know, when we produce a product, we look at labor, we look at the material, we add our profit margin, and that's what we charge the customer. But healthcare delivery, they pick a number, and then, depending on which insurance you have, there's a discount off that number. The plain, simple fact is, I believe, that, unless we start driving down the cost of the healthcare, it doesn't matter whether -- what insurance is going to pay. I always make the analogy that if you bump out your headlight, and it costs $5,000 to fix it, guess what your car insurance is going to cost?

THE VICE PRESIDENT: Right.

PARTICIPANT: So that's the biggest question I have as it relates to the driving down of the healthcare costs. I mean, we just had the baby -- told me the bills were between 25 and 30,000 dollars. I mean, not that my daughter is not worth it. (Laughter.) I just want to make that clear. But, you know, it seems kind of excessive. When Katie was born it was (inaudible) you know? So, he alone would take up two months of our premiums.

THE VICE PRESIDENT: Right. I was in the Congress at the time Obamacare passed and fought against it. By the way, I didn't introduce him but Congressman Jim Renacci is here who is a terrific representative of Ohio in Washington, D.C. -- he's going to be joining me.

All the debate was about how do we lower cost.

A PARTICPANT: The cost of the healthcare.

THE VICE PRESIDENT: With the Democrat majorities, it changed to how do we add universal coverage. And so, frankly, when you see the individual mandate and you see fines against Americans who -- there are 6.5 million Americans who pay a fine instead of paying for insurance. That should tell you something about what the marketplace and insurance offers people in the individual marketplace. There's people saying I'd rather pay a fine than get healthcare -- than pay for the insurance (inaudible) research for yourself.

President Trump is committed to shifting the debate back to lowering the cost of health insurance, giving states greater freedom and flexibility to reform Medicaid to meet the needs of the most vulnerable. But I'll tell all of you, thank you for sharing your stories. I want to thank members of the media for being here. And this is what I hear all over the country -- what the American people are experiencing with Obamacare and it's why's we're working so hard to get the job done. And I just promise you help is on the way. Okay?

PARTICIPANTS: Thank you.

THE VICE PRESIDENT: We're going to get this thing done.

A PARTICPANT: Our sales aren't increasing at the rate healthcare is increasing. And we need help.

THE VICE PRESIDENT: Yeah, we're coming.

A PARTICIPANT: (Inaudible.) We belong to the same association -- all four of us manufacturers would be a national number of an association plan --

THE VICE PRESIDENT: And why shouldn't your local manufacturers like Tendon, like yourself be able to buy insurance the way a major corporation, a major national corporation can buy health insurance for its employees? These are the changes that can come -- free market competition will work, lower costs, improve benefits, as it always has throughout our history. And with your help and with our Senate' help, we're going to get it done. Thank you. (Applause.)



Citation: Mike Pence: "Remarks by the Vice President in a Listening Session with Small Business Owners at Tendon Manufacturing in Cleveland, Ohio," June 28, 2017. Online by Gerhard Peters and John T. Woolley, The American Presidency Project. http://www.presidency.ucsb.edu/ws/?pid=126606.
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