1 00:00:00,120 --> 00:00:03,920 Speaker 1: This episode of Bloomberg Benchmark is sponsored by HSBC, winner 2 00:00:03,960 --> 00:00:07,800 Speaker 1: of Trade Finance America's sixteen Company Award for best Supply 3 00:00:07,880 --> 00:00:12,360 Speaker 1: Chain Finance Bank in North America HSBC where ambition connects 4 00:00:12,360 --> 00:00:16,280 Speaker 1: with opportunity. I have to applaud you for not calling 5 00:00:16,320 --> 00:00:19,880 Speaker 1: it sibelious group. It really seemed there like every former 6 00:00:19,920 --> 00:00:33,080 Speaker 1: official was adding group after their name. Hi, and welcome 7 00:00:33,120 --> 00:00:36,239 Speaker 1: back to Bloomberg Benchmark, a show about the global economy. 8 00:00:36,320 --> 00:00:40,519 Speaker 1: It is Thursday April. I'm Tori Stiwell and economics reporter 9 00:00:40,600 --> 00:00:43,320 Speaker 1: with Bloomberg News in d C. And I am joined 10 00:00:43,360 --> 00:00:46,560 Speaker 1: by my co host Dan moss Are, Executive Economics editor 11 00:00:46,640 --> 00:00:50,920 Speaker 1: in New York. Cadien. Hi, Tory, Great to be here. Yeah. Well, 12 00:00:50,960 --> 00:00:53,680 Speaker 1: I'm not sure if everyone has seen the headline s lately, 13 00:00:53,880 --> 00:00:56,840 Speaker 1: but the Patient Protection and Affordable Care Act a k 14 00:00:57,040 --> 00:01:01,160 Speaker 1: Obamacare is back in the news. United Health Group, which 15 00:01:01,200 --> 00:01:04,440 Speaker 1: is a health insurer, last week announced that it will 16 00:01:04,520 --> 00:01:08,280 Speaker 1: drop out of the government organized health insurance markets in 17 00:01:08,319 --> 00:01:11,039 Speaker 1: at least twenty three states because it's losing too much 18 00:01:11,040 --> 00:01:14,360 Speaker 1: money on those policies. And United Health had about almost 19 00:01:14,360 --> 00:01:17,520 Speaker 1: eight hundred thousand a c A customers as of March one, 20 00:01:17,600 --> 00:01:19,800 Speaker 1: so there are a decent number of people who will 21 00:01:19,840 --> 00:01:22,559 Speaker 1: have to shop for new plans or be left for 22 00:01:22,720 --> 00:01:26,440 Speaker 1: with fewer options for coverage. And Obamacare has also remained 23 00:01:26,480 --> 00:01:30,720 Speaker 1: a hot issue during this election cycle. A Kaiser Family 24 00:01:30,760 --> 00:01:35,720 Speaker 1: Foundation pole last month showed seventy eight of registered voters 25 00:01:35,800 --> 00:01:39,960 Speaker 1: say health care is very or extremely important to them 26 00:01:40,000 --> 00:01:42,800 Speaker 1: when it comes to deciding who they'll vote for. And 27 00:01:42,920 --> 00:01:45,600 Speaker 1: that was second only to you guessed at the economy 28 00:01:45,680 --> 00:01:49,880 Speaker 1: and jobs. With the law staying squarely in the spotlight 29 00:01:50,040 --> 00:01:52,800 Speaker 1: some six years after its passage, we thought this was 30 00:01:52,840 --> 00:01:56,200 Speaker 1: a great opportunity to break down exactly what it is, 31 00:01:57,000 --> 00:01:59,960 Speaker 1: what it's supposed to do, and how that's been work 32 00:02:00,000 --> 00:02:02,840 Speaker 1: hang out and because so much of the debate centers 33 00:02:02,880 --> 00:02:08,360 Speaker 1: on economic issues, the impact on businesses, on employment, on healthcare, inflation, 34 00:02:08,840 --> 00:02:11,800 Speaker 1: Benchmark is the perfect forum for a discussion that's right. 35 00:02:11,800 --> 00:02:13,560 Speaker 1: And I can't speak for everyone else, but I do 36 00:02:13,639 --> 00:02:17,000 Speaker 1: feel like every time I hear a discussion about the 37 00:02:17,040 --> 00:02:20,760 Speaker 1: Affordable Care Act, it's usually very one sided. Um and 38 00:02:20,800 --> 00:02:24,360 Speaker 1: so we have a solution for that here on Benchmark. 39 00:02:24,639 --> 00:02:27,160 Speaker 1: We have two guests here with me in the DC 40 00:02:27,280 --> 00:02:30,360 Speaker 1: studio to help us make sense of it all. First off, 41 00:02:30,400 --> 00:02:34,080 Speaker 1: we have the former US Health Secretary, Kathleen Sibelius. She 42 00:02:34,160 --> 00:02:37,359 Speaker 1: helped President Barack Obama. Shephard the law through Congress back 43 00:02:37,400 --> 00:02:40,760 Speaker 1: in and she oversaw the writing of tens of thousands 44 00:02:40,800 --> 00:02:44,639 Speaker 1: of pages of regulations and traveled regularly to persuade Americans 45 00:02:44,680 --> 00:02:47,320 Speaker 1: to sign up for coverage through the new online market places. 46 00:02:47,960 --> 00:02:50,640 Speaker 1: After resigning two years ago, she now runs her own 47 00:02:50,639 --> 00:02:54,440 Speaker 1: consulting firm, Sibelius Resources. I have to applaud you for 48 00:02:54,520 --> 00:02:57,920 Speaker 1: not calling it Sibelious Group. It really seemed there like 49 00:02:58,040 --> 00:03:02,600 Speaker 1: every former official was adding group after their name. We 50 00:03:02,680 --> 00:03:05,639 Speaker 1: also have Jim Capretta, who spent more than two decades 51 00:03:05,680 --> 00:03:10,040 Speaker 1: studying American healthcare policy, and lately he's specifically been looking 52 00:03:10,080 --> 00:03:14,440 Speaker 1: at market based alternatives to Affordable Care Act. He's a 53 00:03:14,480 --> 00:03:17,840 Speaker 1: senior fellow at the Ethics and Public Policy Center and 54 00:03:17,880 --> 00:03:21,560 Speaker 1: a visiting fellow at the American Enterprise Institute. Now, Jim, 55 00:03:21,600 --> 00:03:24,640 Speaker 1: I hope you won't mind me placing the American Enterprise 56 00:03:24,680 --> 00:03:28,200 Speaker 1: Institute on the spectrum of think tanks that are clustered 57 00:03:28,240 --> 00:03:32,440 Speaker 1: around d C. How would you characterize that think tank? Well, 58 00:03:32,480 --> 00:03:35,200 Speaker 1: I think it's fair fair to say that mostly it's 59 00:03:35,200 --> 00:03:37,840 Speaker 1: an independent organization. People can take their own point of view, 60 00:03:37,880 --> 00:03:39,680 Speaker 1: but most of the people there tend to be on 61 00:03:39,760 --> 00:03:43,000 Speaker 1: the on the conservative side of the spectrum or to 62 00:03:43,040 --> 00:03:46,600 Speaker 1: some degree. Good to have you both here, Thank you, 63 00:03:46,840 --> 00:03:48,720 Speaker 1: Good to be with you. Dan and I are going 64 00:03:48,760 --> 00:03:51,160 Speaker 1: to start out with a brief overview of a c 65 00:03:51,480 --> 00:03:53,760 Speaker 1: just to give all of our listeners sort of a 66 00:03:53,800 --> 00:03:56,400 Speaker 1: foundation to work off of for the rest of the show. 67 00:03:57,160 --> 00:04:00,000 Speaker 1: So it had the sweeping goals of both giving more 68 00:04:00,080 --> 00:04:03,680 Speaker 1: people health insurance and reshaping a medical system that spends 69 00:04:03,720 --> 00:04:07,360 Speaker 1: more and delivers less than any other wealthy country. It 70 00:04:07,400 --> 00:04:11,520 Speaker 1: was signed into law on March and took full effect 71 00:04:11,520 --> 00:04:15,600 Speaker 1: in October, and it has a few key features that 72 00:04:15,680 --> 00:04:19,600 Speaker 1: you've probably heard about at some point or another. First off, 73 00:04:19,800 --> 00:04:22,840 Speaker 1: the law requires most US citizens and legal residents to 74 00:04:22,880 --> 00:04:25,320 Speaker 1: have health insurance, so if your employer doesn't offer it, 75 00:04:25,560 --> 00:04:27,080 Speaker 1: you need to go out and find it on your own, 76 00:04:27,160 --> 00:04:28,800 Speaker 1: or else you have to pay a fine. So when 77 00:04:28,800 --> 00:04:32,039 Speaker 1: you hear individual mandate, that's what we're talking about. And 78 00:04:32,040 --> 00:04:34,200 Speaker 1: the goal behind that was to make sure we had 79 00:04:34,320 --> 00:04:36,920 Speaker 1: enough healthy customers signing up to balance out the cost 80 00:04:37,040 --> 00:04:39,760 Speaker 1: of sicker ones. And if you meet certain income limits, 81 00:04:39,800 --> 00:04:42,600 Speaker 1: the government also provides subsidies to help you pay for 82 00:04:42,640 --> 00:04:48,320 Speaker 1: that insurance. The law also created state based health insurance exchanges, 83 00:04:48,760 --> 00:04:52,240 Speaker 1: these websites that are sort of like a Kayak dot com, 84 00:04:52,320 --> 00:04:57,240 Speaker 1: but for comparing health insurance packages from different providers. States 85 00:04:57,240 --> 00:05:00,680 Speaker 1: can run their own exchanges, but in many cases they've 86 00:05:00,720 --> 00:05:04,600 Speaker 1: deferred to the federal government to do so. Thirdly, employers 87 00:05:04,640 --> 00:05:07,760 Speaker 1: who don't provide health coverage and have the equivalent of 88 00:05:07,839 --> 00:05:11,400 Speaker 1: fifty or more full time employees will be fined. Those 89 00:05:11,400 --> 00:05:14,320 Speaker 1: who do offer coverage have to pass an affordability test, 90 00:05:14,480 --> 00:05:17,680 Speaker 1: and employers with more than two employees have to automatically 91 00:05:17,800 --> 00:05:20,640 Speaker 1: enroll their employees into plants, with an option for employees 92 00:05:20,640 --> 00:05:24,279 Speaker 1: to opt out. The law also introduced separate exchanges for 93 00:05:24,320 --> 00:05:27,760 Speaker 1: small businesses to purchase coverage for their employees. And lastly, 94 00:05:27,960 --> 00:05:31,360 Speaker 1: the law expanded the number of people eligible for many kite, 95 00:05:31,680 --> 00:05:34,640 Speaker 1: though not all states have chosen to do so. And 96 00:05:34,680 --> 00:05:37,279 Speaker 1: I know that we've just thrown a ton of information 97 00:05:37,279 --> 00:05:39,960 Speaker 1: at everyone, but hopefully our guests here can help us 98 00:05:40,000 --> 00:05:42,520 Speaker 1: digest it all and come up with some answers about 99 00:05:42,600 --> 00:05:45,479 Speaker 1: what's been working and what hasn't. So to start, I 100 00:05:45,520 --> 00:05:47,640 Speaker 1: thought it'd be good for our listeners to get a 101 00:05:47,640 --> 00:05:49,440 Speaker 1: sense of where each of you stand on the issue, 102 00:05:49,960 --> 00:05:52,680 Speaker 1: so succinctly if you could, if you had to label 103 00:05:52,720 --> 00:05:55,960 Speaker 1: the law grantly, I guess a success or a failure, 104 00:05:56,120 --> 00:05:59,240 Speaker 1: which would it be? And why do you want to 105 00:05:59,279 --> 00:06:04,039 Speaker 1: start a self CAVI? Well, sure, I think overall it's 106 00:06:04,080 --> 00:06:07,720 Speaker 1: done pretty well. There are some fragile parts of the 107 00:06:07,839 --> 00:06:11,920 Speaker 1: law that are still evolving. But um, we have the 108 00:06:11,960 --> 00:06:17,000 Speaker 1: lowest number of uninsured people that we've ever had in 109 00:06:17,040 --> 00:06:20,000 Speaker 1: this country, so access to insurance for a part of 110 00:06:20,000 --> 00:06:23,760 Speaker 1: the population who didn't have affordable insurance is definitely working. 111 00:06:23,839 --> 00:06:29,200 Speaker 1: About twenty million new lives are enrolled in either Medicaid 112 00:06:29,200 --> 00:06:34,360 Speaker 1: expanded programs or in the marketplaces. Health costs in spite 113 00:06:34,360 --> 00:06:39,880 Speaker 1: of all of the I would say noise and conflicting 114 00:06:40,080 --> 00:06:45,760 Speaker 1: reports out there, overall health inflation for expenditures across the board, 115 00:06:45,839 --> 00:06:49,280 Speaker 1: government health inflation for the two big programs Medicare and 116 00:06:49,320 --> 00:06:53,440 Speaker 1: Medicaid and what individuals are spending is rising at the 117 00:06:53,560 --> 00:06:58,200 Speaker 1: slowest level in fifty years. And that continues to happen, 118 00:06:58,360 --> 00:07:01,839 Speaker 1: so that while um, no one can say costs have 119 00:07:01,920 --> 00:07:06,000 Speaker 1: gone down, they have been rising at a much slower pace. 120 00:07:06,760 --> 00:07:11,440 Speaker 1: And I think for the first time ever. Health providers 121 00:07:11,480 --> 00:07:17,920 Speaker 1: tell me there is a real um revolution underway in 122 00:07:18,000 --> 00:07:21,760 Speaker 1: terms of how health care is being delivered by providers 123 00:07:22,280 --> 00:07:27,160 Speaker 1: because the government has chosen to use its enormous pay 124 00:07:27,280 --> 00:07:30,960 Speaker 1: lever about a trillion dollars a year to move as 125 00:07:31,000 --> 00:07:34,200 Speaker 1: quickly as possible from fee for service payments, which meant 126 00:07:34,320 --> 00:07:36,680 Speaker 1: the more stuff you do, the more dollars you get 127 00:07:36,680 --> 00:07:42,480 Speaker 1: paid into a more quality based, outcome based payment system, 128 00:07:43,040 --> 00:07:48,080 Speaker 1: better care, lower costs, more improvements along the way, and 129 00:07:48,160 --> 00:07:52,080 Speaker 1: that is beginning to show some very promising results. Jim, 130 00:07:52,160 --> 00:07:55,720 Speaker 1: what do you think, Well, I would say that the 131 00:07:56,040 --> 00:08:00,880 Speaker 1: law in general has and you'll be surprised, this succeeded 132 00:08:00,920 --> 00:08:04,640 Speaker 1: in the ways that we're fairly easy to succeed at 133 00:08:05,320 --> 00:08:07,520 Speaker 1: and but is not doing well and all the things that, 134 00:08:07,560 --> 00:08:11,520 Speaker 1: of course are harder and more difficult to to do. Um. 135 00:08:11,560 --> 00:08:16,560 Speaker 1: The law basically expanded medicaid to many millions of more people. 136 00:08:17,160 --> 00:08:20,640 Speaker 1: That didn't take too much. The eligibility processes are already 137 00:08:20,640 --> 00:08:23,680 Speaker 1: in place all around the country. Uh, it's difficult politically, 138 00:08:23,720 --> 00:08:25,600 Speaker 1: as you can see, there's a lot of resistance to it. 139 00:08:26,000 --> 00:08:29,080 Speaker 1: But essentially what they did is they changed the income 140 00:08:29,160 --> 00:08:31,560 Speaker 1: levels to a higher level and started signing up a 141 00:08:31,640 --> 00:08:34,880 Speaker 1: lot more people in advertising and through the outreach system 142 00:08:34,920 --> 00:08:37,320 Speaker 1: that we're already in place, brought them more into the 143 00:08:37,320 --> 00:08:40,800 Speaker 1: Medicaid program. So of the people, the Congressional Budget Office 144 00:08:40,800 --> 00:08:45,560 Speaker 1: says that in the law likely reduced the people who 145 00:08:45,559 --> 00:08:49,559 Speaker 1: are uninsured or otherwise would have been uninsured by about 146 00:08:49,600 --> 00:08:53,360 Speaker 1: seventeen million people on a base of probably around fifty 147 00:08:53,440 --> 00:08:56,440 Speaker 1: million or so. That is not a small matter. So 148 00:08:56,600 --> 00:08:59,880 Speaker 1: let's all stipulate that they the law has done a 149 00:09:00,800 --> 00:09:03,280 Speaker 1: that part of it um. But I would say if 150 00:09:03,280 --> 00:09:05,719 Speaker 1: you look at the exchanges, which are also supposed to 151 00:09:05,720 --> 00:09:09,720 Speaker 1: be a big part of covering and insured and changing 152 00:09:09,720 --> 00:09:14,760 Speaker 1: how insurance is delivered and establishing a news insurance system, 153 00:09:14,800 --> 00:09:18,559 Speaker 1: I think they're it's largely it's limping along, but it's 154 00:09:18,559 --> 00:09:21,520 Speaker 1: got a lot of problems. First of all, the number 155 00:09:21,559 --> 00:09:24,280 Speaker 1: of uninsured that have gone into the exchanges is probably 156 00:09:24,400 --> 00:09:27,040 Speaker 1: quite low. You don't have an exact estimate, but it's 157 00:09:27,080 --> 00:09:30,000 Speaker 1: probably in the low single digit millions. So most of 158 00:09:30,000 --> 00:09:32,800 Speaker 1: the people that ended up in the exchanges were either 159 00:09:32,960 --> 00:09:36,839 Speaker 1: insured and maybe not so great insurance before, or we're 160 00:09:36,840 --> 00:09:40,400 Speaker 1: in the individual market that essentially got closed down by U. 161 00:09:40,520 --> 00:09:43,720 Speaker 1: The a c A, and they were forced into this market. Uh. 162 00:09:43,840 --> 00:09:46,960 Speaker 1: People who can voluntarily decide to move into the exchanges 163 00:09:47,040 --> 00:09:49,640 Speaker 1: or not, especially if they're paying their own premiums, are 164 00:09:49,679 --> 00:09:52,640 Speaker 1: deciding and huge numbers not to do it. They don't 165 00:09:52,640 --> 00:09:55,600 Speaker 1: find the products attractive, the premiums are too high, the 166 00:09:55,679 --> 00:09:59,000 Speaker 1: deductibles are far too high. Settling for a fine, they 167 00:09:59,080 --> 00:10:01,480 Speaker 1: end up paying the fine, or they stay uninsured, or 168 00:10:01,520 --> 00:10:04,040 Speaker 1: they try to find a way into the employer marketplace 169 00:10:04,080 --> 00:10:08,079 Speaker 1: if they can. If some of this was so easy, 170 00:10:08,520 --> 00:10:12,640 Speaker 1: relatively easy, as you mentioned at the stop, why wasn't 171 00:10:12,640 --> 00:10:17,839 Speaker 1: it done sooner? Oh? For the political circumstances weren't right. 172 00:10:18,080 --> 00:10:20,120 Speaker 1: I mean, I didn't say that it was easy politically. 173 00:10:20,120 --> 00:10:22,679 Speaker 1: I meant it was easy administratively, in the sense that 174 00:10:23,160 --> 00:10:26,400 Speaker 1: we did many Medicaid expansions over the last forty years. 175 00:10:26,440 --> 00:10:28,600 Speaker 1: This was a large one, but another one in a 176 00:10:28,640 --> 00:10:31,199 Speaker 1: long line of Medicaid expansions that brought more people into 177 00:10:31,240 --> 00:10:35,720 Speaker 1: the program. Frankly, we did a huge expansion and Medicaid 178 00:10:35,800 --> 00:10:39,000 Speaker 1: like coverage for children in the nine nineties of almost 179 00:10:39,040 --> 00:10:43,480 Speaker 1: comparable size, and so this wasn't unprecedented in terms of 180 00:10:44,120 --> 00:10:47,480 Speaker 1: bringing more people into a publicly subsidized insurance system. It 181 00:10:47,600 --> 00:10:49,840 Speaker 1: was sort of a well known path to how to 182 00:10:49,880 --> 00:10:53,080 Speaker 1: do that. The difficult part is trying not to have 183 00:10:53,120 --> 00:10:56,440 Speaker 1: as many people on publicly subdidized insurance, having a stable 184 00:10:56,440 --> 00:11:00,400 Speaker 1: insurance market that is outside of publicly running rance it 185 00:11:00,480 --> 00:11:03,320 Speaker 1: is more like a private system there. I think the 186 00:11:03,400 --> 00:11:06,080 Speaker 1: law is having a lot of difficulty. Frankly, well, Jim, 187 00:11:06,120 --> 00:11:08,360 Speaker 1: you mentioned the Congressional Budget Office, and we're going to 188 00:11:08,440 --> 00:11:11,040 Speaker 1: get back to that in a sak. Let's just take 189 00:11:11,040 --> 00:11:14,760 Speaker 1: a step back and consider one of the primary goals 190 00:11:14,880 --> 00:11:18,120 Speaker 1: of the Affordable Care Act, which is to make healthcare 191 00:11:18,760 --> 00:11:23,000 Speaker 1: insurance accessible to more people. Now, as of the end 192 00:11:23,000 --> 00:11:25,920 Speaker 1: of the third open enrollment period under the a c A, 193 00:11:26,160 --> 00:11:29,760 Speaker 1: twelve point seven million had signed up for coverage in 194 00:11:29,760 --> 00:11:34,160 Speaker 1: those marketplaces, up from eleven point seven million last year 195 00:11:34,240 --> 00:11:37,240 Speaker 1: and eight million in twenty fourteen. Now, while that's in 196 00:11:37,400 --> 00:11:41,760 Speaker 1: line with the target the Health Department announced the head 197 00:11:41,760 --> 00:11:44,760 Speaker 1: of this year's open enrollment, it's short of the twenty 198 00:11:44,800 --> 00:11:49,520 Speaker 1: one million the CBO projected for back in March of 199 00:11:49,640 --> 00:11:53,320 Speaker 1: last year, and as I think you mentioned, CBO recently 200 00:11:53,400 --> 00:11:58,320 Speaker 1: lowered its forecast, and which, as Kathleen mentioned, is the 201 00:11:58,360 --> 00:12:02,240 Speaker 1: first full year of Obama's coverage expansion, the percentage of 202 00:12:02,280 --> 00:12:05,480 Speaker 1: people without health insurance was ten point four percent, or 203 00:12:05,559 --> 00:12:08,760 Speaker 1: thirty three million people, according to the Census Bureau. And 204 00:12:08,800 --> 00:12:12,680 Speaker 1: that's down from forty one eight million people. So it 205 00:12:12,760 --> 00:12:16,280 Speaker 1: looks like the law has achieved that goal of providing 206 00:12:16,320 --> 00:12:19,800 Speaker 1: more people with health insurance. But at what sort of cost? 207 00:12:19,880 --> 00:12:23,600 Speaker 1: How has this affected households, and how has this affected 208 00:12:23,679 --> 00:12:26,280 Speaker 1: the US budget? Do you want to start well, I 209 00:12:26,320 --> 00:12:31,040 Speaker 1: think again, what we're talking about is a slice of 210 00:12:31,440 --> 00:12:35,760 Speaker 1: the overall insurance market. The President really had a couple 211 00:12:35,760 --> 00:12:39,200 Speaker 1: of choices and Congress had choices going into this. Do 212 00:12:39,240 --> 00:12:42,800 Speaker 1: you start all over, wipe the slate clean and do 213 00:12:43,440 --> 00:12:47,600 Speaker 1: as some people suggested? And one of our Democratic candidates 214 00:12:47,720 --> 00:12:50,800 Speaker 1: is still suggesting kind of a medicare for all, everybody's 215 00:12:50,840 --> 00:12:55,840 Speaker 1: in a single payer public plan. That was Sanders, That's 216 00:12:55,880 --> 00:12:59,760 Speaker 1: Bernie Sanders. But that was a lively debate in Oh 217 00:12:59,800 --> 00:13:02,360 Speaker 1: No Mine when this whole law was being looked at. 218 00:13:02,559 --> 00:13:04,800 Speaker 1: Or do you and this is the path that the 219 00:13:04,840 --> 00:13:07,800 Speaker 1: President and the majority of Congress chose at the time, 220 00:13:08,240 --> 00:13:10,560 Speaker 1: do you try and fill the gap, so leave in 221 00:13:10,640 --> 00:13:15,800 Speaker 1: place the employer plans worth here there and ninety of 222 00:13:16,000 --> 00:13:21,360 Speaker 1: larger employers offer health insurance continue to offer health insurance. UH. 223 00:13:21,600 --> 00:13:25,040 Speaker 1: Veterans have their own insurance plans, those over sixty five 224 00:13:25,160 --> 00:13:28,880 Speaker 1: have a separate insurance plans, those low income Americans. So 225 00:13:29,400 --> 00:13:32,040 Speaker 1: there was a portion of the market, the individual market 226 00:13:32,280 --> 00:13:35,440 Speaker 1: and some small groups that was really on their own. 227 00:13:35,880 --> 00:13:39,679 Speaker 1: Everybody was medically underwritten, so your own health issues were 228 00:13:39,720 --> 00:13:43,520 Speaker 1: taken into account. You could be totally locked out by 229 00:13:43,520 --> 00:13:46,480 Speaker 1: an insurance company, you could be locked out for the 230 00:13:46,480 --> 00:13:49,760 Speaker 1: conditions which caused you to be sick in the first place, 231 00:13:50,120 --> 00:13:53,960 Speaker 1: and you could be priced pretty much anywhere over the boards. 232 00:13:54,480 --> 00:13:57,400 Speaker 1: That's the portion of the market that the Affordable Care 233 00:13:57,440 --> 00:14:01,680 Speaker 1: Act addressed. And UM there has always been a lot 234 00:14:01,720 --> 00:14:03,720 Speaker 1: of churn in the market, people in and out. If 235 00:14:03,720 --> 00:14:06,319 Speaker 1: they get a job at Ford Motor Company, they dropped 236 00:14:06,360 --> 00:14:08,679 Speaker 1: their own insurance and joined the Ford plan. If they 237 00:14:08,760 --> 00:14:11,440 Speaker 1: leave that job because they retire early, they're back on 238 00:14:11,480 --> 00:14:14,199 Speaker 1: their own. And also some people just signing up for 239 00:14:14,240 --> 00:14:16,760 Speaker 1: plans and then canceling it. You bet, um, and that's 240 00:14:16,800 --> 00:14:19,440 Speaker 1: always happened in the individual market. People moved in and 241 00:14:19,480 --> 00:14:22,160 Speaker 1: out about six months at a time. So some of 242 00:14:22,160 --> 00:14:25,720 Speaker 1: what we're seeing in the new marketplaces is very familiar, 243 00:14:25,920 --> 00:14:28,560 Speaker 1: lots of churn, lots of folks coming in and out, 244 00:14:28,600 --> 00:14:34,640 Speaker 1: incomes change, job circumstances change, um. Not surprisingly, people who 245 00:14:34,640 --> 00:14:39,760 Speaker 1: were older and sicker, we're desperate for some coverage, particularly 246 00:14:39,800 --> 00:14:43,760 Speaker 1: comprehensive coverage where their medical conditions would not be blocking 247 00:14:43,800 --> 00:14:46,160 Speaker 1: them from getting insurance. They were the first ones in 248 00:14:46,200 --> 00:14:48,440 Speaker 1: the door, they were the first ones in the gate. 249 00:14:48,520 --> 00:14:52,480 Speaker 1: They are older and sicker than a lot of people 250 00:14:53,440 --> 00:14:56,400 Speaker 1: who have not chosen yet to come into that market. 251 00:14:56,440 --> 00:15:01,600 Speaker 1: So I think some of what we're seeing is was predictable. 252 00:15:01,960 --> 00:15:04,280 Speaker 1: This is a more expensive popular and when you put 253 00:15:04,320 --> 00:15:06,800 Speaker 1: everybody in the same pool, which is what insurance is 254 00:15:06,840 --> 00:15:10,760 Speaker 1: supposed to be balancing risk, you get sick and I 255 00:15:10,840 --> 00:15:13,320 Speaker 1: don't one year, and then I get sick the next 256 00:15:13,400 --> 00:15:15,760 Speaker 1: year and you don't. That's that's a risk pool. You 257 00:15:15,760 --> 00:15:18,960 Speaker 1: don't need everybody to get sick at once um or 258 00:15:19,080 --> 00:15:21,800 Speaker 1: you can't afford it. So some of what we're seeing 259 00:15:21,840 --> 00:15:25,640 Speaker 1: I think was able to be predicted at the outset 260 00:15:25,840 --> 00:15:29,840 Speaker 1: and able to be looked at. There is more competition 261 00:15:29,880 --> 00:15:33,520 Speaker 1: in this market than there has ever been before. Uh, 262 00:15:33,560 --> 00:15:36,560 Speaker 1: there are more choices that consumers have than they've ever 263 00:15:36,640 --> 00:15:39,280 Speaker 1: had before. But it's still a brand new kind of 264 00:15:39,320 --> 00:15:43,480 Speaker 1: fledgling risk pool that needs to be developed, and we 265 00:15:43,520 --> 00:15:47,400 Speaker 1: need more younger and healthier people to join that market. Yeah, 266 00:15:47,440 --> 00:15:49,680 Speaker 1: and Jim, before we go to break, what do you 267 00:15:49,720 --> 00:15:51,880 Speaker 1: think is the scope for that? Do you think younger 268 00:15:51,920 --> 00:15:54,920 Speaker 1: and healthier people will actually join the market, what its 269 00:15:54,960 --> 00:15:58,120 Speaker 1: future enrollment prospects look like? Well, I mean, I think 270 00:15:58,200 --> 00:15:59,960 Speaker 1: I think it's going to be tough. Frankly, I think 271 00:16:00,120 --> 00:16:02,640 Speaker 1: the the view of the plans that are being offered 272 00:16:02,640 --> 00:16:06,440 Speaker 1: on the exchanges is starting to harden because look, I mean, 273 00:16:06,480 --> 00:16:10,160 Speaker 1: anybody who's blow about two hundred or two the federal 274 00:16:10,200 --> 00:16:13,120 Speaker 1: poverty line and income which for a single person is 275 00:16:13,240 --> 00:16:15,120 Speaker 1: you know, twenty five thousand dollars a year up to 276 00:16:15,160 --> 00:16:17,360 Speaker 1: about thirty dollars a year, they're going to get a 277 00:16:17,440 --> 00:16:19,760 Speaker 1: very large subsidy from the federal government that makes the 278 00:16:19,800 --> 00:16:24,240 Speaker 1: premium relatively attractive inside the exchanges. For anyone who has 279 00:16:24,280 --> 00:16:27,040 Speaker 1: to pay the premium themselves slightly higher incomes where it's 280 00:16:27,040 --> 00:16:30,760 Speaker 1: phased down, the products are looking quite unattractive to them. 281 00:16:31,120 --> 00:16:33,360 Speaker 1: You can look in pulling data and see it. And actually, 282 00:16:33,360 --> 00:16:34,440 Speaker 1: if you just go on on and look at some 283 00:16:34,440 --> 00:16:36,800 Speaker 1: of the offerings you'll see, yeah, actually did it this week. 284 00:16:36,880 --> 00:16:39,080 Speaker 1: You know, a bronze plan or silver plan with a 285 00:16:39,400 --> 00:16:42,400 Speaker 1: with a you know, very large deductible for a single 286 00:16:42,400 --> 00:16:44,960 Speaker 1: person and still a premium of six or seven or 287 00:16:45,000 --> 00:16:47,440 Speaker 1: eight hundred dollars a month. You know, people are gonna 288 00:16:47,440 --> 00:16:49,960 Speaker 1: start to say, I can't afford that, right because I'm 289 00:16:49,960 --> 00:16:52,400 Speaker 1: gonna pay a lot of premium before and a deductible 290 00:16:52,400 --> 00:16:55,880 Speaker 1: before I see any coverage. So I think the the 291 00:16:55,920 --> 00:16:59,560 Speaker 1: attractiveness of the policies is really dependent on the amount 292 00:16:59,600 --> 00:17:02,560 Speaker 1: of federal subsidy a person is getting. And that's the difficulty. 293 00:17:02,560 --> 00:17:05,960 Speaker 1: It's really bifurcated the market for people with incomes in 294 00:17:06,000 --> 00:17:08,359 Speaker 1: the eligibility cut, where they big subsidy, they are finding 295 00:17:08,359 --> 00:17:12,480 Speaker 1: the products relatively attractive. Above that not not so much. 296 00:17:12,680 --> 00:17:14,880 Speaker 1: The only thing I would say before we go to break, 297 00:17:14,960 --> 00:17:19,080 Speaker 1: just so people have what Jim said close at hand. 298 00:17:19,960 --> 00:17:25,040 Speaker 1: I think there is a some misguided view that somehow 299 00:17:25,080 --> 00:17:30,120 Speaker 1: this subsidy is an unusual thing. And virtually every employer 300 00:17:30,200 --> 00:17:35,679 Speaker 1: plan offered, the individual employee has a major share of 301 00:17:35,720 --> 00:17:40,720 Speaker 1: that plan paid by his or her employer. And that's 302 00:17:40,800 --> 00:17:44,640 Speaker 1: the mindset that really this plan was constructed under. Since 303 00:17:44,760 --> 00:17:49,080 Speaker 1: these folks are often mom and pop operators working on 304 00:17:49,119 --> 00:17:53,359 Speaker 1: their own. Entrepreneurs have two or three jobs, they don't 305 00:17:53,440 --> 00:17:58,439 Speaker 1: have an employer paying a share. So the subsidy really 306 00:17:58,600 --> 00:18:02,040 Speaker 1: is the sub institute for an employer plan. I'm gonna 307 00:18:02,040 --> 00:18:05,639 Speaker 1: share most people in any insurance plan could pay a 308 00:18:05,720 --> 00:18:09,120 Speaker 1: hundred percent out of their own paycheck, out of their 309 00:18:09,119 --> 00:18:13,080 Speaker 1: own pocket, and I think that some people have looked 310 00:18:13,080 --> 00:18:16,879 Speaker 1: at the subsidy as something unusual. It actually mirrors what 311 00:18:17,080 --> 00:18:20,399 Speaker 1: happens each and every day in workplace plans, where the 312 00:18:20,400 --> 00:18:23,199 Speaker 1: employer picks up a major share of the tab, and 313 00:18:23,200 --> 00:18:26,600 Speaker 1: then the employee kicks in for him or herself for 314 00:18:26,680 --> 00:18:30,000 Speaker 1: their dependence and moves on. Well, we're going to take 315 00:18:30,040 --> 00:18:32,359 Speaker 1: a quick break for a word from our sponsor, but 316 00:18:32,440 --> 00:18:35,000 Speaker 1: when we come back, we will continue our discussion on 317 00:18:35,040 --> 00:18:37,240 Speaker 1: what's working and what's not with the Affordable Care Act 318 00:18:37,640 --> 00:18:40,080 Speaker 1: and what this year's election may mean for the law 319 00:18:40,320 --> 00:18:47,680 Speaker 1: after this break. This episode of Bloomberg Benchmark is sponsored 320 00:18:47,680 --> 00:18:51,760 Speaker 1: by HSBC, with over eight thousand global relationship managers on 321 00:18:51,760 --> 00:18:55,040 Speaker 1: the ground in over sixty countries. HSBC makes your global 322 00:18:55,080 --> 00:19:02,880 Speaker 1: ambition their local business. HSBC. Let's turn to healthcare costs. 323 00:19:03,080 --> 00:19:08,640 Speaker 1: Healthcare inflation as measured by the personal consumption expenditures that's 324 00:19:08,640 --> 00:19:11,800 Speaker 1: a gauge of the Federal Reserve looks at closely, has 325 00:19:11,880 --> 00:19:17,359 Speaker 1: trailed overall core inflation for three consecutive years now. Economists 326 00:19:17,359 --> 00:19:20,560 Speaker 1: say at least part of that slowdown may be attributed 327 00:19:20,560 --> 00:19:25,399 Speaker 1: to Obamacare, which encourages shorter hospital stays and limits on 328 00:19:25,640 --> 00:19:30,320 Speaker 1: unnecessary procedures. But from what we gather, healthcare costs are 329 00:19:30,440 --> 00:19:37,400 Speaker 1: broadly expected to start re accelerating. Jim Wiser, Well, first 330 00:19:37,440 --> 00:19:41,680 Speaker 1: of all, they did re accelerate. So if you look 331 00:19:41,680 --> 00:19:44,680 Speaker 1: at the national Health Expenditure accounts, the accounts that are 332 00:19:45,119 --> 00:19:47,920 Speaker 1: looked at and run by the government, they announced the 333 00:19:48,080 --> 00:19:52,240 Speaker 1: last year that those costs went up nationwide by five 334 00:19:52,280 --> 00:19:58,119 Speaker 1: point three the highest level and I think seven years Uh. 335 00:19:58,160 --> 00:20:01,760 Speaker 1: The expectation from those same p people is that the 336 00:20:01,800 --> 00:20:07,000 Speaker 1: increase will be similar in and sixteen and beyond. I 337 00:20:07,040 --> 00:20:11,160 Speaker 1: think this notion that the Affordable Care Act is related 338 00:20:11,200 --> 00:20:15,080 Speaker 1: to the broad slowdown in health spending, this is one 339 00:20:15,119 --> 00:20:18,680 Speaker 1: area where I think I will disagree with the secretaries 340 00:20:18,720 --> 00:20:21,560 Speaker 1: that this I don't I don't believe that's the case. 341 00:20:23,240 --> 00:20:25,760 Speaker 1: If you go back to two thousand and two, healthcare 342 00:20:25,760 --> 00:20:28,359 Speaker 1: inflation in the United States was about nine point six percent. 343 00:20:28,960 --> 00:20:31,720 Speaker 1: It fell to four point eight by two thousand and eight. 344 00:20:32,520 --> 00:20:34,480 Speaker 1: So if there was something associated with the A C 345 00:20:34,680 --> 00:20:38,119 Speaker 1: A that brought and then trend continued then into two 346 00:20:38,160 --> 00:20:40,680 Speaker 1: thousand nine, ten and eleven, you'd be hard pressed to 347 00:20:40,720 --> 00:20:43,640 Speaker 1: say people were in anticipating. You know, back in three 348 00:20:43,640 --> 00:20:45,560 Speaker 1: and four and five, you know that the A C 349 00:20:45,680 --> 00:20:47,320 Speaker 1: A was going to be enacted and therefore, you know, 350 00:20:47,440 --> 00:20:50,879 Speaker 1: resulted in this broad slowdown. Moreover, there's been a global 351 00:20:50,920 --> 00:20:54,919 Speaker 1: slowdown in health spending across the entire industrialized world of 352 00:20:55,000 --> 00:20:58,320 Speaker 1: comparable amounts that has occurred in the United States. Now, 353 00:20:58,320 --> 00:20:59,639 Speaker 1: I know, we think the A C A did a 354 00:20:59,640 --> 00:21:02,000 Speaker 1: lot of eight things, but it probably didn't slow down 355 00:21:02,040 --> 00:21:06,040 Speaker 1: health spending global. And yet this period does coincide with 356 00:21:06,320 --> 00:21:10,000 Speaker 1: you mentioned two thousand a night a rather apocalyptic economic 357 00:21:10,119 --> 00:21:15,080 Speaker 1: environment followed by a recovery certainly within the G seven 358 00:21:15,200 --> 00:21:20,520 Speaker 1: that's been okay but not super awesome. Now, could that 359 00:21:22,119 --> 00:21:24,760 Speaker 1: not be driving this rather than anything to do with 360 00:21:24,800 --> 00:21:26,879 Speaker 1: the A C A. If you don't mind, I'll just 361 00:21:26,920 --> 00:21:29,520 Speaker 1: say one more word about this, and I of course 362 00:21:29,600 --> 00:21:33,000 Speaker 1: that's the case. The government actuaries that look at this 363 00:21:33,119 --> 00:21:36,040 Speaker 1: for the government, for the executive branch, have reached that 364 00:21:36,160 --> 00:21:40,120 Speaker 1: exact conclusion. They run a regression analysis several times going 365 00:21:40,160 --> 00:21:43,080 Speaker 1: back decades, and the slowdown that has occurred in recent 366 00:21:43,160 --> 00:21:47,199 Speaker 1: years is very predictable based on the economic conditions that 367 00:21:47,200 --> 00:21:50,200 Speaker 1: occurred in the United States at that time. So look, 368 00:21:50,240 --> 00:21:52,960 Speaker 1: I'm not trying to dismiss entirely everything that is in 369 00:21:53,000 --> 00:21:56,800 Speaker 1: the a c A. Some of those provisions are having 370 00:21:56,840 --> 00:21:59,560 Speaker 1: I think a marginal effect, but by and large, the 371 00:22:00,000 --> 00:22:04,520 Speaker 1: notable care organization phenomenon, the bundled payments, the readmission policy. 372 00:22:04,560 --> 00:22:06,760 Speaker 1: If you look at the estimates that were done both 373 00:22:06,800 --> 00:22:09,240 Speaker 1: at the time they were enacted and since they are 374 00:22:09,359 --> 00:22:13,159 Speaker 1: minor events in a trillions and trillions of dollar health system, 375 00:22:13,280 --> 00:22:15,080 Speaker 1: and let me just push a little let me just 376 00:22:15,119 --> 00:22:17,439 Speaker 1: push you a little bit, there could have not also 377 00:22:17,600 --> 00:22:20,399 Speaker 1: reflect except can I get in this conversation before you 378 00:22:20,440 --> 00:22:22,960 Speaker 1: move in a different direction, because I think I think 379 00:22:23,000 --> 00:22:27,200 Speaker 1: it's important to have a baseline of what we're talking about. 380 00:22:27,320 --> 00:22:30,560 Speaker 1: I don't think there's any question nor any dispute that 381 00:22:31,160 --> 00:22:37,400 Speaker 1: the economic downturn had a significant impact on health expenditures. Overall, 382 00:22:37,480 --> 00:22:40,080 Speaker 1: everyone agrees to that. What I think there is some 383 00:22:41,320 --> 00:22:47,200 Speaker 1: dispute about and now I have seen gather differing reports 384 00:22:47,240 --> 00:22:51,000 Speaker 1: than Jim is reading. A lot of economists are beginning 385 00:22:51,000 --> 00:22:56,240 Speaker 1: to also say, now in twenty sixteen, eight years after 386 00:22:56,520 --> 00:23:01,639 Speaker 1: the economic downturn, that there's a continued slow down in 387 00:23:01,800 --> 00:23:06,440 Speaker 1: health costs. The five percent increases above what was seen 388 00:23:07,240 --> 00:23:10,800 Speaker 1: in prior years, but it's significantly below what the trend 389 00:23:10,840 --> 00:23:14,760 Speaker 1: line was before the turndown. So we're still in a 390 00:23:14,840 --> 00:23:20,000 Speaker 1: period of compressed growth. And in spite of the fact 391 00:23:20,040 --> 00:23:23,400 Speaker 1: that Medicare has more people coming into the program each 392 00:23:23,400 --> 00:23:27,040 Speaker 1: and every day than they've ever seen larger enrollments, Medicaid 393 00:23:27,040 --> 00:23:30,960 Speaker 1: as larger enrollments, their overall health inflation costs are at 394 00:23:30,960 --> 00:23:35,159 Speaker 1: about one point three percent. So we're still seeing a 395 00:23:35,400 --> 00:23:39,400 Speaker 1: change in costs, not necessarily due to, as Jim said, 396 00:23:39,520 --> 00:23:43,840 Speaker 1: some of the new ways of paying providers organizing providers, 397 00:23:43,880 --> 00:23:48,160 Speaker 1: but I think there's a very significant change underway within 398 00:23:48,200 --> 00:23:52,280 Speaker 1: the health system, understanding that the payment system is going 399 00:23:52,320 --> 00:23:54,320 Speaker 1: to look very different in the future, and that money 400 00:23:54,400 --> 00:23:57,000 Speaker 1: is actually coming out of the system for the first time. 401 00:23:57,640 --> 00:24:00,280 Speaker 1: I want to hit two more points before and out 402 00:24:00,280 --> 00:24:03,040 Speaker 1: of time. One of those is one that's very near 403 00:24:03,040 --> 00:24:05,280 Speaker 1: and dear to my heart as an economics reporter, and 404 00:24:05,359 --> 00:24:10,440 Speaker 1: that is the A c AS effect on employment, and um, 405 00:24:10,480 --> 00:24:14,080 Speaker 1: you know, economists themselves are still debating what the effect 406 00:24:14,280 --> 00:24:16,879 Speaker 1: is there. And you know, some have said that it 407 00:24:16,880 --> 00:24:20,320 Speaker 1: would encourage employers to shift more people into part time 408 00:24:20,359 --> 00:24:23,720 Speaker 1: work to avoid providing that health insurance and the regulatory 409 00:24:23,720 --> 00:24:25,679 Speaker 1: headache that would come with trying to figure out how 410 00:24:25,720 --> 00:24:28,119 Speaker 1: to do that. Um, and others have said, you know, 411 00:24:28,200 --> 00:24:32,399 Speaker 1: it sort of liberates employees to a certain extent, allows 412 00:24:32,400 --> 00:24:34,800 Speaker 1: them to strike it on their own, et cetera. Why 413 00:24:34,920 --> 00:24:38,879 Speaker 1: is the impact on employment so murky and how do 414 00:24:38,920 --> 00:24:42,000 Speaker 1: you eventually think that will shake out? Well, I think 415 00:24:42,080 --> 00:24:45,080 Speaker 1: the the gold standard for looking at this is probably 416 00:24:45,160 --> 00:24:48,640 Speaker 1: the Congressional Budget Office, And there's a lot of forces 417 00:24:48,680 --> 00:24:51,040 Speaker 1: going in both directions. I'll grant you that in the 418 00:24:51,119 --> 00:24:53,760 Speaker 1: A c A there's some provisions and economists might say 419 00:24:53,840 --> 00:24:57,720 Speaker 1: might improve employment, But the biggest effects, according to CBO, 420 00:24:57,840 --> 00:25:02,160 Speaker 1: go in the opposite direction toward the hampening labor force participation. 421 00:25:02,720 --> 00:25:07,400 Speaker 1: And what they estimated is that by twenty nineteen or so, 422 00:25:08,480 --> 00:25:11,600 Speaker 1: two and a half million people at full time equivalent 423 00:25:12,040 --> 00:25:15,080 Speaker 1: of hours worked will drop out of the labor force 424 00:25:15,160 --> 00:25:16,840 Speaker 1: due to the incentives of the A, C, A and 425 00:25:17,080 --> 00:25:20,919 Speaker 1: the mechanism. The reason is that the subsidy structure is 426 00:25:20,960 --> 00:25:23,800 Speaker 1: provided for people so that they can First of all, 427 00:25:23,920 --> 00:25:26,520 Speaker 1: a lot of people can now get health insurance without working. 428 00:25:26,960 --> 00:25:28,320 Speaker 1: So it used to be that if you were not 429 00:25:28,400 --> 00:25:31,720 Speaker 1: on Medicaid, the most straightforward way to get health insurance 430 00:25:31,800 --> 00:25:34,280 Speaker 1: was actually to actually go into the labor force, try 431 00:25:34,320 --> 00:25:37,240 Speaker 1: to get an employer that had insurance and get coverage 432 00:25:37,320 --> 00:25:39,840 Speaker 1: that way. Now that's not the greatest way to do 433 00:25:39,920 --> 00:25:41,679 Speaker 1: things in the world, but that's that's the reality. So 434 00:25:41,720 --> 00:25:44,760 Speaker 1: when you provided a lot of insurance options for people 435 00:25:44,800 --> 00:25:47,240 Speaker 1: outside of the employement sector, some people do drop out 436 00:25:47,240 --> 00:25:50,320 Speaker 1: of the labor market. The second big effect is you 437 00:25:50,440 --> 00:25:53,520 Speaker 1: phase out the subsidies by income, so as you earn 438 00:25:53,600 --> 00:25:56,880 Speaker 1: more money, you get a smaller subsidy by the federal government. 439 00:25:57,320 --> 00:26:00,600 Speaker 1: That's according to CBO, it's like a sent essentially like 440 00:26:00,600 --> 00:26:03,240 Speaker 1: an implicit tax on earned income on top of the 441 00:26:03,240 --> 00:26:05,680 Speaker 1: payroll tax, on top of the income tax. And it's 442 00:26:05,760 --> 00:26:09,320 Speaker 1: quite substantial, and so some people in the two D 443 00:26:10,080 --> 00:26:12,760 Speaker 1: the poverty range will actually work less than the otherwise. 444 00:26:12,800 --> 00:26:14,879 Speaker 1: With well, let's just keep with the job market for 445 00:26:15,000 --> 00:26:17,359 Speaker 1: just one second. In Kathleen, you may want to jump 446 00:26:17,359 --> 00:26:22,560 Speaker 1: in here, you know, Jim, this is an uneven economic recovery, 447 00:26:22,640 --> 00:26:25,879 Speaker 1: to be sure, but one bright spot is the labor market. 448 00:26:25,960 --> 00:26:30,159 Speaker 1: It's going gangbusters. Unemployment rate in the United States is 449 00:26:30,160 --> 00:26:33,680 Speaker 1: approaching five jobless claims are the lowest in a couple 450 00:26:33,680 --> 00:26:36,760 Speaker 1: of generations. I mean, if this was such a dire 451 00:26:36,920 --> 00:26:40,680 Speaker 1: thing for the labor market, wouldn't it be showing up? Well. 452 00:26:40,880 --> 00:26:43,800 Speaker 1: I think, you know, as someone who's looked at this carefully, 453 00:26:43,880 --> 00:26:47,359 Speaker 1: that the people that have exited the labor force is 454 00:26:47,400 --> 00:26:50,840 Speaker 1: still in these several millions compared to what it was 455 00:26:51,320 --> 00:26:54,040 Speaker 1: prior to the downturns. So much of that is due 456 00:26:54,080 --> 00:26:56,880 Speaker 1: to retirements, right that. Some of it is early retirements, 457 00:26:56,920 --> 00:26:58,879 Speaker 1: but some of it is people who just decided at 458 00:27:00,040 --> 00:27:02,760 Speaker 1: that they would rather you know, they find the prospects 459 00:27:02,760 --> 00:27:05,439 Speaker 1: not very good, and so they're not entering the job markets. 460 00:27:05,520 --> 00:27:08,399 Speaker 1: I mean, it's it's hard to argue that the labor 461 00:27:08,440 --> 00:27:11,520 Speaker 1: market is great when the number of people United States, 462 00:27:11,560 --> 00:27:13,920 Speaker 1: the population has grown, and the number of people in 463 00:27:13,920 --> 00:27:16,320 Speaker 1: the United States working today is still not fully caught 464 00:27:16,400 --> 00:27:18,480 Speaker 1: up to the trend line that would have been had 465 00:27:18,520 --> 00:27:22,880 Speaker 1: we not had the recession. Well, I find this discussion, 466 00:27:25,119 --> 00:27:30,840 Speaker 1: frankly sort of baffling, given the predictions which were dire 467 00:27:31,400 --> 00:27:35,199 Speaker 1: when this law was passed. The prediction was that this 468 00:27:36,280 --> 00:27:39,520 Speaker 1: a c A Obamacare bill would be a job killer. 469 00:27:40,200 --> 00:27:45,200 Speaker 1: We have had fourteen million new jobs over the last 470 00:27:45,200 --> 00:27:49,280 Speaker 1: seventy three months, the longest continued growth of jobs in 471 00:27:49,280 --> 00:27:52,320 Speaker 1: the country. So I think at a macro level, it's 472 00:27:52,440 --> 00:27:55,200 Speaker 1: very hard to argue that we've had a job killer 473 00:27:55,240 --> 00:27:59,920 Speaker 1: bill the CBO data. I also take a slightly different lens. 474 00:28:00,000 --> 00:28:02,719 Speaker 1: It's no question that there may be some people impacted 475 00:28:02,760 --> 00:28:06,239 Speaker 1: by subsidies. There also are lots of people who no 476 00:28:06,359 --> 00:28:11,240 Speaker 1: longer have to stay in a job beyond what they 477 00:28:11,320 --> 00:28:14,920 Speaker 1: would like to do until they get to Medicare eligibility age, 478 00:28:16,040 --> 00:28:19,920 Speaker 1: because now if you retire early, you have an option 479 00:28:20,119 --> 00:28:22,879 Speaker 1: for health insurance that you didn't have before. And actually 480 00:28:22,960 --> 00:28:28,439 Speaker 1: the single largest uninsured population prior to the passage of 481 00:28:28,480 --> 00:28:31,960 Speaker 1: this bill where people fifty five to sixty five. So 482 00:28:32,119 --> 00:28:36,639 Speaker 1: there was some job lock based on I have to 483 00:28:36,720 --> 00:28:40,280 Speaker 1: stay for insurance. My wife has to take an off 484 00:28:40,360 --> 00:28:43,760 Speaker 1: farm job to get insurance for the family farm. We 485 00:28:43,840 --> 00:28:47,560 Speaker 1: have to make certain kinds of job choices, which now 486 00:28:48,480 --> 00:28:51,440 Speaker 1: hopefully people are able to start their own business, to 487 00:28:51,480 --> 00:28:54,480 Speaker 1: look at a second career, do other things. So there 488 00:28:54,560 --> 00:28:59,400 Speaker 1: is some way of looking at also this job flexibility, 489 00:28:59,440 --> 00:29:03,600 Speaker 1: which is not necessarily a bad idea, but maybe very 490 00:29:03,640 --> 00:29:07,600 Speaker 1: positive idea. And finally, the largest growth sector, one of 491 00:29:07,600 --> 00:29:11,080 Speaker 1: the largest growth sectors in this new jobs economy is 492 00:29:11,080 --> 00:29:14,440 Speaker 1: in the health care area. Lots of people coming into 493 00:29:14,440 --> 00:29:19,240 Speaker 1: the health career for service delivery, for tech involvement I 494 00:29:19,440 --> 00:29:24,160 Speaker 1: T has exploded, startups have exploded, so it's been in 495 00:29:24,200 --> 00:29:27,720 Speaker 1: its own economic boost I would say over the last 496 00:29:27,760 --> 00:29:30,520 Speaker 1: five years. Well, I think we need to wrap up 497 00:29:30,560 --> 00:29:33,000 Speaker 1: here shortly, but I think this is an important part 498 00:29:33,000 --> 00:29:35,080 Speaker 1: and I do want to act get to this part 499 00:29:35,240 --> 00:29:38,560 Speaker 1: of the interview. So I want to turn to the 500 00:29:38,560 --> 00:29:42,840 Speaker 1: future of the law. Congressional Republicans have led effort after 501 00:29:42,920 --> 00:29:45,719 Speaker 1: effort to repeal the law, and we know that it 502 00:29:45,800 --> 00:29:50,560 Speaker 1: does remain fairly a little unpopular with voters have an 503 00:29:50,600 --> 00:29:54,320 Speaker 1: unfavorable view of the A c A compared with who 504 00:29:54,360 --> 00:29:57,760 Speaker 1: have a favorable favorable view, and that's fairly well split 505 00:29:57,800 --> 00:30:01,360 Speaker 1: along party lines. Um Ted it has promised to repeal it. 506 00:30:01,480 --> 00:30:04,520 Speaker 1: Donald Trump has also promised to repeal it and replace 507 00:30:04,600 --> 00:30:08,240 Speaker 1: it with quote something so much better. Um And on 508 00:30:08,280 --> 00:30:11,200 Speaker 1: the other hand, heavily Clinton wants to keep Obamacare but 509 00:30:11,360 --> 00:30:14,840 Speaker 1: fix its shortcomings. Jim, why the focus do you think 510 00:30:15,240 --> 00:30:19,480 Speaker 1: from Republican lawmakers on repealing instead of making what we 511 00:30:19,560 --> 00:30:24,760 Speaker 1: have better? Uh? Well, first of all, I need to 512 00:30:24,800 --> 00:30:27,480 Speaker 1: say that I don't think the just for the for 513 00:30:27,560 --> 00:30:30,160 Speaker 1: your listeners, I don't think the stances of the two 514 00:30:30,280 --> 00:30:34,920 Speaker 1: leading Republican candidates is very uh satisfactory. I think if 515 00:30:34,920 --> 00:30:37,880 Speaker 1: they're going to talk about healthcare, I think they're going 516 00:30:37,920 --> 00:30:41,600 Speaker 1: to whoever becomes the nominee will need to provide to 517 00:30:41,640 --> 00:30:45,760 Speaker 1: the public a much clearer view of what vision they 518 00:30:45,760 --> 00:30:48,520 Speaker 1: have for healthcare in the United States that would actually 519 00:30:48,520 --> 00:30:51,840 Speaker 1: work as practical and could pass in the Congress. So 520 00:30:52,080 --> 00:30:54,000 Speaker 1: there's going to be an obligation, and I think both 521 00:30:54,000 --> 00:30:56,440 Speaker 1: of the leading candidates for the time being have fallen 522 00:30:56,520 --> 00:30:59,480 Speaker 1: way short of that. So having said that, I think 523 00:30:59,520 --> 00:31:04,000 Speaker 1: in con risk the the main view is that, you know, 524 00:31:04,320 --> 00:31:08,160 Speaker 1: there is a basic philosophical problem here that needs to 525 00:31:08,200 --> 00:31:11,160 Speaker 1: be addressed and settled and maybe eventually will be perhaps 526 00:31:11,200 --> 00:31:12,960 Speaker 1: in favor of the law that's already on the books, 527 00:31:13,080 --> 00:31:17,240 Speaker 1: which is that how much authority over the health system 528 00:31:17,400 --> 00:31:19,760 Speaker 1: do you want to have residing with the federal government. 529 00:31:20,200 --> 00:31:23,320 Speaker 1: I mean, I think that's fundamentally the issue. And of course, 530 00:31:23,600 --> 00:31:26,160 Speaker 1: in the short term, you know, it doesn't make that 531 00:31:26,280 --> 00:31:28,440 Speaker 1: much difference. It's really over a ten or fifteen or 532 00:31:28,440 --> 00:31:31,120 Speaker 1: twenty year period where the federal government can exert a 533 00:31:31,120 --> 00:31:33,560 Speaker 1: lot more authority and power over the health system, as 534 00:31:33,600 --> 00:31:35,680 Speaker 1: we were just talking about it, with delivery system reformed 535 00:31:35,720 --> 00:31:39,120 Speaker 1: through Medicare, changing how physicians are are paid, changing the 536 00:31:39,200 --> 00:31:44,240 Speaker 1: quality metrics for physicians, changing how when rates insurance plans. 537 00:31:44,520 --> 00:31:46,920 Speaker 1: The federal government has a huge amount of authority now 538 00:31:47,000 --> 00:31:49,880 Speaker 1: under this law, and I think the basic concern amongst 539 00:31:49,920 --> 00:31:52,880 Speaker 1: opponents in the Congress, I mean, people who actually understand 540 00:31:52,920 --> 00:31:54,880 Speaker 1: how it works, is that they think it's too much 541 00:31:55,280 --> 00:31:57,720 Speaker 1: that over time that's going to erode its quality, you know, 542 00:31:57,800 --> 00:32:01,080 Speaker 1: force a lot of people into publicly and publicly subsidized 543 00:32:01,120 --> 00:32:04,680 Speaker 1: products and publicly regulated products, it will be of lower value. 544 00:32:05,680 --> 00:32:07,960 Speaker 1: Do you think, Kathleen, that it's realistic that this whole 545 00:32:07,960 --> 00:32:09,920 Speaker 1: thing gets rolled back if we if we do get 546 00:32:09,960 --> 00:32:14,760 Speaker 1: a Republican president in sixteen, and if not, why do 547 00:32:14,800 --> 00:32:18,160 Speaker 1: you think Republicans keep focusing on it? Well, there certainly 548 00:32:18,200 --> 00:32:23,440 Speaker 1: has been a constant drumbeat since the day the President 549 00:32:23,520 --> 00:32:29,640 Speaker 1: signed this law that it should be repealed and replaced. 550 00:32:30,120 --> 00:32:33,880 Speaker 1: I think that second term, I would absolutely agree with Jim. 551 00:32:34,040 --> 00:32:36,600 Speaker 1: Six years after the law was signed, I still have 552 00:32:36,720 --> 00:32:40,400 Speaker 1: no idea what that means, and I'm not sure that 553 00:32:40,520 --> 00:32:44,960 Speaker 1: there have been many viable suggestions put forth about what 554 00:32:45,040 --> 00:32:47,880 Speaker 1: that means, except let's run just a national high risk 555 00:32:47,960 --> 00:32:50,280 Speaker 1: pool and everybody who's sick can be in a risk 556 00:32:50,320 --> 00:32:52,680 Speaker 1: pool and go back to the old days where insurers 557 00:32:52,720 --> 00:32:56,160 Speaker 1: could basically they can choose who they wanted to cover 558 00:32:56,400 --> 00:32:59,800 Speaker 1: in in this individual market. Again, if you work for 559 00:32:59,800 --> 00:33:02,440 Speaker 1: four Motor Company and you sign up for their health plan, 560 00:33:02,520 --> 00:33:05,280 Speaker 1: they don't go through your own personal health history, they 561 00:33:05,280 --> 00:33:09,840 Speaker 1: don't limit your ability to participate your an employee you're in. 562 00:33:10,600 --> 00:33:14,840 Speaker 1: So the individual market is really what we're talking about. 563 00:33:14,880 --> 00:33:17,680 Speaker 1: Should people be able to buy insurance, should they be 564 00:33:18,120 --> 00:33:21,719 Speaker 1: pulled together? I think there are lots of areas of 565 00:33:21,760 --> 00:33:26,920 Speaker 1: this law that could have some significant improvement. I hope 566 00:33:26,960 --> 00:33:29,720 Speaker 1: we get to a discussion in the next Congress where 567 00:33:29,760 --> 00:33:32,880 Speaker 1: maybe that's an effort. How do we move forward, What 568 00:33:33,000 --> 00:33:38,000 Speaker 1: kinds of alternatives are there to ensuring more people, bringing 569 00:33:38,000 --> 00:33:42,320 Speaker 1: down costs, making delivery system reform really work and accelerate 570 00:33:42,360 --> 00:33:44,880 Speaker 1: the progress has been made. How can we work together 571 00:33:44,960 --> 00:33:48,720 Speaker 1: to do it as opposed to relitigating the past. So 572 00:33:49,160 --> 00:33:51,520 Speaker 1: we'll see what happens, but I would agree with you, 573 00:33:51,680 --> 00:33:56,560 Speaker 1: I'm eager to see what the candidates mean by replace 574 00:33:56,960 --> 00:34:00,320 Speaker 1: and what proposition they are willing to put forward to 575 00:34:00,360 --> 00:34:02,600 Speaker 1: the public. Well, thanks so much to both of you 576 00:34:02,800 --> 00:34:04,720 Speaker 1: for joining us. I know I learned a lot today 577 00:34:04,760 --> 00:34:07,680 Speaker 1: and I hope our listeners did too. And Benchmark will 578 00:34:07,680 --> 00:34:09,759 Speaker 1: be back next week. Until then, you can find us 579 00:34:09,760 --> 00:34:12,399 Speaker 1: on the Bloomberg terminal and Bloomberg dot com, as well 580 00:34:12,400 --> 00:34:15,640 Speaker 1: as on iTunes, Pocketcast, and Stitcher. And while you're there, 581 00:34:15,840 --> 00:34:17,680 Speaker 1: please take a minute to rate and review the show 582 00:34:17,760 --> 00:34:20,359 Speaker 1: so more listeners can find us and do let us 583 00:34:20,400 --> 00:34:22,479 Speaker 1: know what you thought of the show. You can talk 584 00:34:22,520 --> 00:34:25,239 Speaker 1: to and follow us on Twitter at Daniel most d 585 00:34:25,400 --> 00:34:28,479 Speaker 1: C and at Tory Stillwell. We'll see you next week. 586 00:34:37,239 --> 00:34:42,360 Speaker 1: This episode of Bloomberg Benchmark was sponsored by HSBC. 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