• With: Rep. Frank Pallone, D-N.J.

    This is a rush transcript from "The Kelly File," October 30, 2013. This copy may not be in its final form and may be updated.

    MEGYN KELLY, HOST: Joining me now, Democratic New Jersey Congressman, Frank Pallone. He's a member of the Energy & Commerce Committee. He was one of the lawmakers questioning the Secretary today. Congressman, thank you for being here.

    REP. FRANK PALLONE, D-N.J.: Thank you.

    KELLY: We're struggling to understand how Ms. Sebelius can say the president kept that promise. That specific one of if you like your healthcare you can keep it, period, I guarantee it, when we've seen 2 million Americans have policies cancelled so far. And the estimates are it will top 10 million.

    REP. PALLONE: Well you can keep it as long as the insurance company agrees to continue to sell it. But the problem is a lot of insurance companies now have been caught because they're selling lousy plans at a high price that are skeletal and don't provide any benefits. So they are now cancelling those lousy plans. In which case many of them are just a scam and saying, look we're not going to sell this anymore because nobody's going to buy it. And therefore we'll try to get, we'll give you a better plan that has better benefits at a more affordable price.

    So the president never said that he could stop the insurance companies from cancelling plans. This is a private market. This is a competitive market. They're not going to sell something they can't sell.

    KELLY: Okay. But that's only partially true. But what you're saying is only partially true.

    REP. PALLONE: What's only partially true?

    KELLY: There are some insurance companies who cancelled policies. And that's what insurance companies--

    REP. PALLONE: They cancelled the policies --

    KELLY: Wait a minute, let me just, let me pose --

    REP. PALLONE: They don't have to sell them. It's a private market.

    KELLY: Let me pose the question. Then you respond. Some of the insurance companies said, all right, I'm going to cancel the policies because that happens on the insurance market.

    REP. PALLONE: Right.

    KELLY: But many, many other policies -- in fact, according to the insurance companies the vast majority of these policies that are being cancelled are being cancelled because the regulations imposed on them by ObamaCare left them with no choice. The way the HHS --

    REP. PALLONE: That is absolutely not true.

    KELLY: The HHS regulations --

    REP. PALLONE: They have a right to continue the policies --

    KELLY: She admitted it. She admitted it today, sir.

    REP. PALLONE: She did not admit that.

    KELLY: She did too.

    REP. PALLONE: That's simply not true.

    KELLY: She was asked about whether --

    REP. PALLONE: The insurance companies can cancel the policies if they want to. They can offer policies at the same price for the same lousy benefits if they want to.

    KELLY: If they change the policies in any marginal way then ObamaCare requires that they be cancelled and the people get kicked off.

    REP. PALLONE: No, that's not true.

    KELLY: Yes. She was asked about this today by a $5 increase in the premium.

    REP. PALLONE: It's not true. ObamaCare --

    KELLY: Let's run the sound bite. Let's run the sound bit, $5 change, $5 change and you're kicked off. Watch.

    REP. PALLONE: ObamaCare simply says that --

    KELLY: Stand by.

    (BEGIN VIDEO CLIP)

    REP. WILLIAM CASSIDY: If coinsurance went up by any amount, even by a dollar according to your regulations that would not qualify as a grandfathered clause? Just to have that out there for the record. I gather even by a dollar.

    HHS SECRETARY KATHLEEN SEBELIUS: Dr. Cassidy, I want to start by the amount that you gave is not accurate. I was told $5, not a dollar.

    (END VIDEO CLIP)

    KELLY: So she's not saying, no, you're wrong. They can't cancel the people if the policy changes by five dollars. She's saying, yes you're right. If they up your premium by $5 it's cancelled, ObamaCare kicks in, the person gets a cancellation notice and they're wondering where to get their insurance.

    REP. PALLONE: Look the bottom line is, they tell them where they can get the insurance. Look, the bottom line is, if you are selling a lousy policy at a price that's too high, nobody is going to buy it. And so they're cancelling these policies because they know people can't, won't buy them.

    KELLY: OK.

    REP. PALLONE: It's a competitive marketplace.