CELESTE HEADLEE: Bringing the cost down. Here to explain how [the Republicans are] planning to do that is Congressman Eric Cantor. He's the House Minority Whip, from Virginia. Thanks so much for joining us.

Rep. ERIC CANTOR: Thank you.

CELESTE HEADLEE: Do you agree that the essential philosophical difference between your plan and that of the Democrats is that they're trying to get universal coverage, you're just trying to get the cost of health insurance down?

Rep. ERIC CANTOR: No, I don't believe that. I believe that we Republicans want everyone to have access to health care as well. We just go about it in a different way: a much smarter, more reasoned approach. I think the goal that was set up by the president was, 'We've got to bring down costs, because the government cannot sustain its obligations under the health care programs that it pays for -- Medicare, Medicaid, S-CHIP and the rest -- given the cost trajectory. Nor can individuals, small and large businesses, afford to pay the kind of health care premiums that they continue to have to pay, given the increases.' So what our bill does is it puts in place mechanisms to create competition and actually bring down costs. This is the primary difference between the Republican and Democratic bills: the Congressional Budget Office came out yesterday and validated our claims that individuals and small groups would be able to save up to 10 percent a year on their health care costs...

CELESTE HEADLEE: That's assuming that they're going to get a collective bargaining discount.

Rep. ERIC CANTOR: No, that's not what I mean ...

CELESTE HEADLEE: So how are you going to bring down the costs for an individual who's trying to shop for insurance for themselves?

Rep. ERIC CANTOR: Well, number one, we're going to allow for across-state-lines purchases. If I live in Virginia and there is a policy that fits my needs in the neighboring state of North Carolina and it is a hundred dollars cheaper, I'll be able to go and purchase that plan in North Carolina. That's impossible to do today. What it will do is it will give an individual, perhaps, the opportunity to choose from a hundred different insurance plans rather than maybe two or three that individuals have now, given the monopoly that insurance companies have in any given region.

CELESTE HEADLEE: Okay, but Congressman, just to play devil's advocate, here: for the millions of people who are uninsured, I don't think it's a question of cost. I don't think that saving a hundred dollars by shopping across state lines is going to help get those people insured. In other words, if someone's health care premium is $300 a month as opposed to $400 a month, for millions of people that's going to make it possible for them to get health care insurance.

Rep. ERIC CANTOR: Well, let's look at what we're talking about in terms of what "the uninsured" actually means in this country. If you look at a breakdown, roughly a third of the uninsured, frankly, are already eligible for existing government programs, and frankly we haven't done a good job at trying to reach out and enroll those individuals. We need to do a better job in making sure that that happens, to address that portion of the uninsured. There are also individuals who, frankly, may be young, may be looking to say, 'Hey, I don't need insurance, I'm healthy,' and decide to go without. And then what happpens is they have an accident and then they run into some real difficulties and can bankrupt themselves because they don't have insurance. Those are the kind of people that we want to say, 'Look, we're going to have a much more affordable option, there's going to be real competition -- Washington's not going to decide for you what kind of insurance you can have. We want you to have a pick of what kind of insurance meets you and your family's needs.'

JOHN HOCKENBERRY: Okay, Congressman, on the question of cost, then. Does the Republican caucus support requiring pharmaceutical companies to be reimbursed for their products at the lower Medicare rate, rather than what's currently done, allowing market forces to set prices for certain reimbursements?

Rep. ERIC CANTOR: What we've seen in Medicare Part D, where Medicare beneficiaries have experienced access to pharmaceutical benefits is, real price competition. We want to continue to see that; we want to continue to see folks having access to the lowest-cost price. What we don't want to see is government fixing prices, because that's what's going on now ...

JOHN HOCKENBERRY: But wouldn't that actually reduce costs, Congressman? To actually make ... [crosstalk] It would save $80 billion.

Rep. ERIC CANTOR: No, it would not, because somebody's got to pay for it somewhere. The government can't come in by fiat and insist that a product be charged at a certain price. Where's the money going to come from? What's happening right now in the health care system, and this is what the Democratic bill does in terms of all health care services, it says, 'The government thinks that things are too expensive, so we're going to put a cap on those expenses.' Well, you know what? That's the way the current system works in many instances, so there is cost-shifting going on, and that's why the 85% of Americans who have insurance now think it's too expensive, because the government's saying, 'We're just not going to pay any more.' Where does the money come from? It doesn't come out of thin air. It comes from people's taxes; it comes from people's paycheck. That's what we're trying to avoid. We're trying to avoid the fact that we cannot have access to health care because it's becoming too expensive.

CELESTE HEADLEE: There are four main priorities that we saw on the Republican health care plan priorities. The fourth one was to end junk lawsuits and medical malpractice lawsuits. I want to talk to you about that one, because recent very very good research has shown us that medical malpractice makes up only 2% of U.S. health spending. How is tort reform in health care going to bring down the cost of health care?

Rep. ERIC CANTOR: Well, Celeste, I think the Congressional Budget Office would differ with your conclusion, there, because the Congressional Budget Office says ...

CELESTE HEADLEE: ... That's actually the 2004 report from the Congressional Budget Office, said medical malpractice makes up only 2% of U.S. health spending ...

Rep. ERIC CANTOR: ... the Congressional Budget Office report as of several weeks ago indicates that the government alone, in Medicare, Medicaid, S-CHIP and the rest, would have a reduced cost of $54 billion in terms of medical liability reform. Real medical liability reform. So that's number one. But what we also want to do is address the fact that no-one should have to go without insurance if they find themselves with a pre-existing condition, and we address that fact in our bill. And we do so without increasing costs, which is another difference between the Republican and Democratic plans. We also say ...

CELESTE HEADLEE: Wait, before you leave the pre-existing conditions, from what I understood from the Republican health care plan, you are not barring insurance companies from refusing coverage because of a pre-existing condition.

Rep. ERIC CANTOR: Celeste, what we're doing is requiring states to set up universal access programs, so that if individuals find themselves with a pre-existing condition and are re-upping their insurance policy or seeking new insurance, and they cannot get it at an affordable rate, their insurance company will be required to go into a re-insurance pool set up in all the states, funded by the federal government, putting $25 billion into those pools. That insurance company will seek re-insurance and the holder of the policy will not even know the difference, because his or her rates will be subsidized by the government in that instance.

JOHN HOCKENBERRY: Well, that's government-imposed influence in the market, it's just state government.

Rep. ERIC CANTOR: No, it's federal-government subsidized, with the states, and the participation of the insurance companies. We've got to have a safety net there for individuals with pre-existing conditions, and that is the mechanism. In fact, the Democratic bill sets up -- before their government takeover of the bill, they address that by the same way we do. Look, you know what the difference is? The difference is that the Democratic bill is a trillion dollar overhaul, and puts us on a path towards government takeover. The Republican bill costs $61 billion and over the period will save the federal government $68 billion. This is what we need right now in America. We cannot keep spending money we don't have.

JOHN HOCKENBERRY: People, the people up in the 23rd District of New York weren't buying the government takeover argument; the conservative got his head handed to him up there. This draconian argument doesn't really fly.

Rep. ERIC CANTOR: Well, that is ... I don't think that's correct in what went on in New York 23. I think the elections on Tuesday demonstrated that if the Republican Party is united, whether we're running in a northern state or southern state, we can win. And we can even win in a very Democratic state like New Jersey. When we're divided, obviously, we can lose a race in a Congressional District that has and should be a Republican seat.

CELESTE HEADLEE: You know, I have to ask, Congressman Eric Cantor of Virginia: the Republican bill doesn't really have a chance of passing. So instead of coming up with a separate plan from the Democrats, why not take your ideas to them and help to alter the debate on the current Democratic health care plan that may get passed?

Rep. ERIC CANTOR: Well, we have tried consistently to do that, despite all the claims of working across the partisan aisle, neither the White House nor any Democratic leader in Congress has done anything of the sort. I will say that I have met several times with Majority Leader Stenny Hoyer, who has been one to try at least to have some meetings to discuss health care reform, but in fact even he, on the floor of the U.S. House of Representatives two weeks ago, told me he saw no reason to even talk with Republicans, because none of us will support this gargantuan government imposing its will on the market...

CELESTE HEADLEE: Well, maybe your proposal now will bring Democrats back to the table. We'll see if that sparks some dialog. That's Congressman Eric Cantor, Republican of Virginia, the House Minority Whip, talking about the Republicans' alternative health care plan proposal.