10:58 A.M. EDT

THE PRESIDENT: Listen, thank you all for coming. Thanks for coming. Please be seated. So Hoekstra said, get over here. (Applause.) He said, come to Muskegon. I said, okay, see if you can get some people to show up. (Applause.)......................

"THE PRESIDENT: Appreciate that. Thanks. See, I believe government ought to help people who can't help themselves. And the idea is to help people so they can help themselves -- but there are some who just can't, some who are stuck, some who are poor. In the land of plenty, there are pockets of poverty, we've got to understand that. And the idea is to make sure that preventative health care is available through community health centers.

I want to thank you for your compassion. An interesting point he said was these health centers spawn other acts of generosity in communities -- people see that they're up and available, and other people who have got good hearts, who want to love their neighbor like they'd like to be loved themselves step up and participate in helping those who hurt, in helping those who need help.

And so one way to make sure health care is available is to expand community health centers throughout the country. And that's what we're doing. I want to thank you for coming, Tom.

Another way to make sure health care is affordable and available is to help small businesses with health care. Now, here's the problem for small businesses: they go out and bid in the current system and they don't have a significant pool of people to spread risk. That's the problem. They're in the midst of trying to provide health care in their businesses and they go out and try to get a bid for health care, and they're kind of a little, stand-alone entity. Now, big companies are able to pool risk because of their size. We believe in order to make sure health care is available and affordable, that little companies ought to be able to bind -- be bound together, share risk, so they can get the same discounts that big companies get. (Applause.)

David. David Pray. I was looking for you, and finally found you. (Laughter.) Tell us what you do.

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THE PRESIDENT: Good, that's a good sign, isn't it? Upbeat guy. Small company, how many employees?

MR. PRAY: We have 10 employees.

THE PRESIDENT: Ten, that's small. That's the definition of a small business. And so he was telling me aboard Air Force One there that he has some problems with health care.

MR. PRAY: Well, we've been -- through Associated Builders and Contractors, we have been in a state-wide pool for quite some time. And for a lot of years, we enjoyed about a 10 to 15 percent cost advantage over being -- over going out and finding single, affordable policies elsewhere.

THE PRESIDENT: So they got a plan here in Michigan where you can pool together. It's a nice concept. However?

MR. PRAY: However, last year, the state of Michigan passed legislation called Small Group Health Care Reform which, instead of now being able to pool the risk over 400 member companies, premiums are now calculated based on claims history. So we don't have the advantage of pooling anymore. And the immediate effect for our company was a 29 percent increase in our premiums. And bear in mind that we, as a company, feel a duty to provide the medical and dental care, not only for the employee, himself, but for his dependents. We fund 100 percent of that cost.

THE PRESIDENT: So here's what we're talking about. Listen, this guy's a responsible guy, you know. He says, I've got a duty as a employer of people to do the best I can do. The problem is the system is so designed that he can't really do his job because he is unable to pool risk. See, the more people you have in the risk pool, the lower the cost of health insurance. That's just how it works.

And so what we're suggesting is, is that David be able to combine with companies, not only in Michigan, but nationwide. I mean, why shouldn't a guy building commercial construction in Texas not be able to put his employees in the same pool as David? The reason why is because the health systems were designed for the past. The current health care system is stuck in the past, as far as I'm concerned.

A national plan -- in other words, people being able to bind together nationally would mean that a lot of mandates that now affect the cost of health care would not be -- would not be imposed upon these small businesses, and it means that more people could bind together. People resist this because they like the system the way it is. What we're interested in is, we don't like the way it is. We're interested in change. Government must be willing to change with the times. Association health plans mean we're willing to change with the times to help small employers be able to provide good health insurance for their workers. (Applause.)

Another way -- as you can see, I've got a strategy to make sure health care is available and affordable without the federal government making the decisions for you. See, we've said, we're going to take care of those who can't help themselves, we're going to make sure small businesses are able to afford insurance, just like big businesses can do, and now, I want to talk about a very interesting idea called health savings accounts. This is a different approach to health care, which will mean that the patient and doctor are essential to the decision-making process, and helps us hold down the cost of health care. Health savings accounts are an innovative idea that became the law of the land as a result of the Medicare bill I signed. And I want -- I want some people to describe. Matt, are you willing to describe what it means?

MR. VENEMA: Yes.

THE PRESIDENT: Okay, don't worry about all the cameras. (Laughter.)

MR. VENEMA: All right, all right. I'll try to forget about those.

THE PRESIDENT: First, start with the name of the company and why you're even involved.

MR. VENEMA: The name of our company is All-Flo Plumbing, LLC. We're a plumbing contractor in the Grand Rapids and West Michigan region. We were struggling under the burden of our health care.

THE PRESIDENT: How many people, sorry?

MR. VENEMA: Fourteen employees, 12 full-time.

THE PRESIDENT: Small business, thousands of small businesses just like his all over the world, all over the country, all over America. (Applause.) The heart and soul of the American economy are these small business owners. Sorry. Giving you time to warm up. (Laughter.)

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THE PRESIDENT: Hold on a minute. Sorry. You've got to make sure the people understand what we're talking about. A lot of times, you use initials in government. (Laughter.) HSA. Okay, here it is.

So you buy a high deductible --

MR. VENEMA: High deductible health policy.

THE PRESIDENT: -- health policy to cover for major medical costs, right?

MR. VENEMA: Correct. Correct.

THE PRESIDENT: So, for example, if you're a family -- I've said, this company, he'll tell you what his is, I think it's a zero --

MR. VENEMA: Pardon me?

THE PRESIDENT: What is your deductible in your --

MR. VENEMA: It's $3,500 for a family plan.

THE PRESIDENT: So above $3,500, the insurance company will take care of the costs.

MR. VENEMA: Absolutely.

THE PRESIDENT: And then so what happens between zero and $3,500?

MR. VENEMA: As the employer, we took most of the portion of our savings and funded the HSA plans for each individual employee.

THE PRESIDENT: So the company is now putting in the money to cover routine medical expenses from zero to $3,500. They're able to put it in tax-free, they're able to rollover the money tax-free, and they're able to take the money out of the HSA tax-free.

MR. VENEMA: Yes, it's a nice benefit for the individual employee. If they happen to have a good health situation, they get a tax-free savings account. If something goes wrong, they're still covered. And my wife and I gave this a good test run last year because we had a premature baby, and $20,000 in health bills at the hospital, and it worked like a charm. So we're very happy with this plan.

THE PRESIDENT: Let's make sure we understand here. This is -- we're trying to simplify what sounds like a complex issue. And zero to $3,500, you pay -- "you" being the company and the employee, depending upon the arrangement. Now, if you spend $2,000 in the year, $1,500 of that $3,500 that's in your account rolls over for the next year. And that's your money. And it's tax-free, it rolls over. So you build up a health savings account over time. (Applause.)

Now, think about a system, by the way that provides an incentive for you to make good choices with your life. If you save that money by -- because you're healthier, that may cause you to go out and walk 20 minutes a day. No fooling. In other words, the system all of a sudden says, you're in charge. You, the employee, or, you, the patient, you're in

charge of your decisions, as opposed to somebody far away making decisions whether or not you deserve this or not through your insurance plan, you're the person in charge. And there's a tax incentive for you to make right decisions.

All right, any savings?

MR. VENEMA: Yes, actually when we switched over, the premium savings have been phenomenal. Our total group expenditure right now for health insurance, including what we contribute to everyone's HSAs, is $38,500 a year, approximately. If we were still under our previous conventional plan, it would be about $81,000 a year. So we're talking about a 52 percent savings for our group. And we've been very excited about that. (Applause.)

THE PRESIDENT: These work. I'm telling you, they work. They make a lot of sense. (Applause.) Health care is more affordable under health savings accounts, and health care is more manageable because the decision-making is between the patient and the doc. And it's really important for people to understand that. This stands in contrast to a system where the federal government is going to say, oh, here's what's going to happen here. We're going to move people from private health insurance to expanded Medicaid, for example. You don't want the government making decisions on your behalf when it comes to health care. And this is one of the fundamental philosophical differences in this campaign, is who do you trust? We trust the people. My opponent trusts the government to make decisions when it comes to health care.

Now, we've got another man here who knows something about it. Jim, tell us what's -- welcome.

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THE PRESIDENT: It's an interesting twist. (Laughter.) You're not the first person in America, by the way -- (laughter an applause.) Go ahead. Would you care to clarify why you were mad at me? (Laughter.)

MR. GLUPKER: I can do that --

THE PRESIDENT: -- a fellow like me, sitting here.

MR. GLUPKER: I'm just a little disappointed that it wasn't available to me 30 and 35 years ago, when I was a young family, you know? Because then that account would have a lot more in it than it does today.

THE PRESIDENT: Yes, see, explain to people -- you've got an account up and running. And you've used it?

MR. GLUPKER: I've used it, and the interesting thing is, when we changed over --

THE PRESIDENT: They work for the same company, by the way.

MR. GLUPKER: Yes. We were able to keep our same doctors, which was interesting. And the other thing is, because it's our money, when we go shopping for prescription drugs and stuff, we shop, because why pay $100 for that prescription when you can go down the street and only pay $80?

THE PRESIDENT: Yes. See, that's a very interesting point, isn't it? There is a marketplace in America if consumers are empowered to have choice. That's what we're talking about here. We go shop. The old system, when the government is involved, they don't shop. They dictate. Here, consumers shop. It's your money. You're in charge of your money. In this case, the company puts a lot of money in there that you call your own money. It's part of the -- it's part of how they make sure the labor relations are good inside this little company, is they contribute to the health savings account. And he's out shopping.