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YOUR BOTTOM LINE

The Impact of Obamacare

Aired June 30, 2012 - 09:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


CHRISTINE ROMANS, HOST: The Supreme Court has spoken. Obamacare is upheld. So why does it still feel like we're at the beginning and not the end? Good morning, everyone. I'm Christine Romans. For starters, the ugly politics of the Obamacare debate have totally swamped some very important challenges we still have in health care. This was always meant to increase coverage, access to health insurance. It doesn't mean lower cost or better health.

Take a look. The U.S. ranked dead last in a study of seven nations according to a report by the Commonwealth Fund. The report looked at factors such as quality of care and access to care. But look at the cost. If you combine the per-capita cost of the top two nations on this list, the Netherlands and the United Kingdom, you still don't equal the per-capita cost of the health care in the U.S. Now, health care costs were soaring long before Obamacare, and those costs have continued to rise in the two years since it became the law of the land.

In other words, like a lot of things with this president, he didn't cause this problem, but he hasn't fixed it either. And Republicans are still not ready to give up the fight over Obamacare, despite the Supreme Court decision. The message both before and after the ruling is crystal clear.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I will repeal Obamacare.

FORMER SEN. RICK SANTORUM, R-PA.: We need to repeal Obamacare.

CROWD: Repeal and replace.

REP. MICHELE BACHMANN, R-MINN.: Repeal Obamacare.

SEN. MITCH MCCONNELL, R-KY.: There is only one way to truly fix Obamacare, only one way, and that's a full repeal.

(END VIDEO CLIP)

ROMANS: Repeal and replace. But replace with what? Republican Randy Forbes of Virginia was one of the few people who was actually inside that courtroom when the historic decision was announced. Congressman, thanks for joining us this morning.

REP. RANDY FORBES, R-VA.: Thank you, Christine. It's great to be with you.

ROMANS: All right. The Republican Study Committee put out a 27-page document containing more than 200 pieces of health care legislation proposed by congressional Republicans. 200 pieces of legislation. I read a lot in this. I have this document. I read a lot here about abortion, about tort reform, about repealing it outright, but I don't really see anything that really deals with the overall problem of lack of coverage and diminished quality in return for the world's most expensive health care. If Obamacare is repealed, what replaces it? What replaces it that is better, sir?

FORBES: Well, Christine, I think we have to start with the fact that what did we get from Obamacare? And as you just mentioned, when Obamacare was passed, we were told that we were going to have greater access. When you look in point of fact, we are having less access. We hear doctors time and time again saying they are leaving the system and we are not going to have the access that we need to have for medical treatment.

The second thing, our costs have gone up, not down. So we believe that there's a series of things you could do. One of the things we think we should do is keep some of the provisions that make sense, like not penalizing people for pre-existing conditions when they are getting health insurance.

ROMANS: Wait a minute, sir, but we are keeping those because the Supreme Court has ruled that we're keeping those things. This is the law of the land. I mean, honestly, it has been ruled this will be -- wouldn't it be better if people would spend less time adding to uncertainty about what's going to happen next, and instead educate their constituents and small businesses about how to adapt to the mandates.

FORBES: Christine, that would make sense except for the fact that as we travel across this country, we realized that with this bill, we're going to lose thousands of jobs, and that's what we're told by employers, that's not some pontification. The employers are saying it--

ROMANS: Is there any evidence of that? I know (inaudible), what is the evidence? Give me the one piece of evidence that says that.

FORBES: The best evidence is from the mouths of the employers, Christine. And if you ask employers across the country, we are seeing not just a few, but literally thousands of them telling us every place we go, they are not going to expand their businesses. Some of them cutting back. It's going to be a job killer, because they can't afford these huge taxes that the Supreme Court says this bill puts on them.

The second thing, Christine, important to remember, the Supreme Court didn't say this was a good bill. They said it was a constitutional bill. But Justice Roberts made it clear. This court wasn't going to protect us from bad political decisions of our elected leaders. This Obamacare was a bad political decision.

That's why it's important, it's not just rhetoric. It's important if we're going to create jobs in this country that we not continue to pass legislation that's doing to kill those jobs.

The second thing is, it's important that we actually get health care to people, which we can do a much better job selling insurance across state lines, it's going to get costs down. Also, we would put more money, I would, on medical research, which I think could change the health care curve much better than some of the stuff we're doing.

ROMANS: Let me bring in Governor Romney here. He says it's up to the voters to repeal Obamacare now. Listen.

(BEGIN VIDEO CLIP)

MITT ROMNEY, GOP PRESIDENTIAL CANDIDATE: This is a time of choice for the American people. Our mission is clear. If we want to get rid of Obamacare, we're going to have to replace President Obama. My mission is to make sure we do exactly that.

(END VIDEO CLIP)

ROMANS: If President Obama wins in November, sir, are you ready to concede that the president signed a law, the Supreme Court upheld it, and the voters endorsed it. So then will you move on?

FORBES: Well, Christine, I don't think that voters are going to endorse it. And just because the president has signed a law into effect doesn't mean it's a good one. This president also wants to have literally billions of dollars in defense cuts, but we're going to continue fighting those. Just because the president signed it into law doesn't mean it's good law.

I don't think Obamacare is good law. And I think it's incumbent upon us to try to change it and make something that is going to work for the American people.

ROMANS: So in the end, is there as much uncertainty today as there was even a week ago? And isn't it uncertainty that was the thing the GOP was saying is the problem with Obamacare in the first place? That businesses and people didn't know how to handle the mandates?

FORBES: Christine, as you know, when the Democrats voted and passed it out, they had a lot of uncertainty as to what was in it. As you remember the famous phrase that they had to pass it before they would know what's in it.

ROMANS: But that's ancient history. The Supreme Court has ruled on this. It's been two years since it happened. Shouldn't you be helping your constituents understand, telling people what the mandates are, that small businesses with 51 people or more will have to pay a fine if they don't figure out how to get people covered. That actually only 4 percent of small businesses will be affected. Anybody under 50 employees doesn't have to worry about it, and teaching people about the state exchanges. Shouldn't we be educating about it now instead of still fighting about it?

FORBES: Christine, the more they find out about this, the more they are opposed to this. Whether you talk to doctors, whether you talk to health care providers, hospitals or small businesses, the more they find out, they more they realize this is a bad decision and they want it overturned. I think that's what we're going to see them doing in November and that's what we're going to continue to fight to make sure happens.

ROMANS: We appreciate you coming by. We're going to talk more in this program about what small businesses in particular need to do and how they need to start planning now for this. Congressman, thank you so much. Randy Forbes from Virginia. Have a nice weekend.

They are the most vulnerable players in the bitter debate over access to affordable health care. Children with a pre-existing medical condition.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: We found out about Cam's disorder in an odd way, because of family history, particularly on my side of the family, and some early deaths from heart disease and known high cholesterol, including my own. We decided when he turned two to have his cholesterol tested. They discovered that his cholesterol was already, I'm going to say, somewhere between 500 and 600.

(END VIDEO CLIP)

ROMANS: What the Supreme Court ruling means for little Cam and his family next.

(COMMERCIAL BREAK)

ROMANS: Before the break, we introduced you to the Tipping family. Their son Cam was diagnosed with a rare and deadly form of high cholesterol. He was diagnosed at 2 years old. That's considered a pre- existing condition. What if this happened to you or your family? Should it be covered? Will you be covered? Well, guess what, the Supreme Court has decided that the answer is yes. Let's bring in Cam's mother, Marla Tipping, and Andrew Rubin. He is the VP of clinical affairs and affiliates at NYU's Langone Medical Center and the host of Sirius XM's "Doctor Radio."

Marla, nice to see you, nice to meet you, and little Cam is well. Tell me what is the intensity of his medical care that you're doing right now? I know he's under your husband's insurance. How often is he going to the doctor? What kinds of things, procedures is he having done?

MARLA TIPPING, MOTHER OF CHILD WITH PRE-EXISTING CONDITION: Well, ordinarily, he's in the hospital every other Thursday for a procedure that filters his blood and takes out the LDL cholesterol from his blood. So as you can imagine, that's a pretty intense procedure. And at the moment, he's not doing LDL apheresis, because we're on a drug study to see if they can make some headway with a drug rather than the LDL apheresis.

ROMANS: What a brave little guy. We have pictures of him as a toddler and now he's, you know, he's getting older. This is obviously a pre- existing condition for him. If your husband were to lose his job or to lose his insurance, this would have been an issue for you. The Supreme Court gives you some breathing space here.

TIPPING: Absolutely. And I think that yesterday, I was asked what my reaction to the decision was. And I said it was a mixture of relief and hope, because I think it is the right decision for not just our family, but for all Americans to have this certainty that if you have a serious medical condition, you can always get covered.

ROMANS: I want to bring in Andrew Rubin quickly. Clearly a victory for people with pre-existing conditions. But there's still some political uncertainty hanging over this legislation, particularly in an election year, at least for people with pre-existing conditions. The Supreme Court has set this aside. They will be covered.

ANDREW RUBIN, NYU LANGONE MEDICAL CENTER: Health care reform, whether it's survived or not, hospitals and doctors were preparing for this, because we have to find better ways to take care of patients in a more cost effective setting. What this portion of the law gives that little boy Cam some hope and protection, that he and so many other Americans, you know, didn't have.

ROMANS: It seems that kids are going to get covered no matter what. Someone is paying for that. He has expensive medical care.

RUBIN: Sure. There is not a lot of centers around the country that actually have this treatment. It's very expensive, it is every two weeks for Cam. It runs from $2,500 to $3,000 a treatment. You can do the math. Plus all the drugs, and doctor visits on top of that. It's expensive. So this will certainly give all American families the opportunity to have this on their insurance and covered with no caps, no annual caps anymore, no lifetime caps, because you know, until there's a cure for this, this is going to be very expensive to treat.

Now, there are certainly state Medicaid programs and federal programs, Medicare for disabled people, but sometimes access is a little difficult in those situations. And I think most American families would prefer to have people like Cam stay on their parents' policy.

ROMANS: Marla, your husband's insurance has been good, right? You've been happy with the employer-based coverage you've had so far?

TIPPING: We've had excellent insurance coverage over the years and actually have been with the same provider since Cam was diagnosed. It's a company here in Minnesota called Medica. And they have been an incredible partner for us in this journey, and have really done everything they can to cover whatever we need for Cam.

ROMANS: And if you were to have to go out in the open market and buy insurance because of health care reform, you would be able to go to a state exchange, Minnesota state exchange I guess, and you'd be able to buy a plan, and your son wouldn't be penalized for already having a pre-existing condition in terms of price. Right?

TIPPING: That's what I understand, yes.

ROMANS: So you have options. You have options should your employment change. And that's interesting, Andrew, because a lot of times in this country, your insurance comes with your job. Through health care reform, I think a lot of people don't understand, that now your insurance doesn't have to be only tied to your job anymore.

TIPPING: Absolutely. I was reading an article on the CNN Money website, where they talk about people who don't leave their jobs, they don't move out of state because they are afraid of losing their insurance. Now, people are going to hear a lot in the news about whether employers are going to drop them from their insurance plans, and what's going to happen. You have Governor Romney saying one thing, President Obama saying another.

ROMANS: A lot of politics. People just want to figure out what it means for their health care.

TIPPING: Exactly. And what it basically means is no one really knows the future yet, but what it really means for the short-term is that people are going to always have health insurance.

ROMANS: If your name is Cam, and you have a high cholesterol problem as a preexisting illness, you will be able to have health insurance in this country. Marla, would you give our best to your son?

TIPPING: I sure will. Thank you.

ROMANS: All right, thank you telling us your story. Andrew, thanks so much.

Coming up next, he was a health insurance CEO advising the president on health care reform. He was a supporter of the mandate but has since changed his mind. What he says now about the Supreme Court decision. That's next.

(COMMERCIAL BREAK)

ROMANS: My next guest had a front row seat as an adviser to the health care legislation. Eventually he broke with the president over the individual mandate, which the Supreme Court upheld with the rest of the law this week. Ron Williams is a former chairman and CEO of Aetna, one of the country's largest health care providers. Welcome to the program.

RON WILLIAMS, FORMER CEO, AETNA: Thank you. It's a pleasure to be here.

ROMANS: Were you disappointed with the Supreme Court's decision?

WILLIAMS: No, actually, I was not. I would have been disappointed if the Supreme Court had upheld the mandate utilizing the Commerce Clause. I think my big concern is I did not feel as a citizen that the Commerce Clause was an appropriate application.

Given that the court interpreted it to be a tax, which I think the legislation was fairly ambivalent, and I think we all know the public statements about it -- the fact that it's a tax and the court ruled that it's well within the power of Congress, I'm fine with it. And I think that the mandate is something that can work. There are lots of other choices that could have worked. And I think it's worked well in Massachusetts.

I would have been a supporter of more choices for states to make other decision to achieve the ultimate objective in getting everyone covered.

ROMANS: When you say it can work, you mean it will get everybody covered and people can have affordable health care?

WILLIAMS: Well, I think the answer is it provides a path to access. When you think about the mandate, there are roughly about 7 million people in the U.S. for whom the mandate would actually apply. Those individuals would either have to buy insurance or be subject to the mandate as a tax on their income.

ROMANS: Do you think that employers in droves, as some Republicans have suggested, are going to start dumping -- basically dumping their workers from their own health care insurance rolls and pushing them onto the exchanges? That's been one of the complaints from many Republicans. They think that employers are going to stop eventually providing insurance for their employees?

WILLIAMS: I think what we're on is a journey. And I don't believe that employers are going to take any sudden, precipitous action, particularly large employers. I think for small employers who either don't offer coverage, that there will be an incentive not to offer coverage because their employees will be able to get it through an exchange or through a Medicaid-type program. And I think for employers who are facing really difficult economic decisions, there may very well be an incentive to not offer coverage. I think we'll have to wait and see how it plays out.

ROMANS: You know, it's interesting, in this country there's a feeling that what's good for the insurance companies must not be good for the public. I mean, true or not, that is the perception. Do health care costs and quality have to be a zero-sum game? Is there an intersection of interests here? Can we change that perception?

WILLIAMS: I think absolutely we have to change the perception. Insurance companies don't have a business if health care is so unaffordable that no one can buy it. When you think about how much money the U.S. spends on health care, today we spend about 17 percent of our gross domestic product. Projections are that we'll spend about 21 percent of our gross domestic product in about ten years. That means we would go from spending $2.7 million to spending about -- excuse me, $2.7 trillion to $4.7 trillion. That's $2 trillion more.

ROMANS: Wow.

WILLIAMS: I think the health industry, health insurers can play a fundamental role in improving quality and a fundamental role in digitizing the system, and really also getting patients and members engaged in their own wellness.

ROMANS: Yes, that's important. Getting engaged is so important because a lot of people still don't even understand what's in this law that is now the law of the land. Ron Williams, thank you so much. Nice to see you, sir. Have a nice weekend.

WILLIAMS: Thank you.

ROMANS: Up next, the truth about what the Affordable Care Act means for small businesses. A fact check on what the legislation will actually mean for jobs.

(COMMERCIAL BREAK)

ROMANS: If you believe Obamacare haters, American jobs, millions of them, will be lost, and small businesses will go under.

(BEGIN VIDEO CLIP)

ROMNEY: Obamacare is a job-killer.

REP. JOHN BOEHNER, R-OHIO, HOUSE SPEAKER: The president's health care law is hurting our economy, driving up health care costs, making it harder for small businesses to hire new workers.

BACHMANN: Millions of jobs are about to move out of the United States.

(END VIDEO CLIP)

ROMANS: A GOP battle cry in unison, but is it true? The law mandates employees with 50 employees or more must provide insurance. Of about 6 million employers in America, that's 200,000 businesses. Simple math -- Obamacare affects 4 percent of small businesses, 4 percent. If you have fewer than 25 employees and you decide to offer health care -- it is not a mandate -- but if you decide to give them health care, you get a tax credit. To qualify for the credit, the average salary at your small business must be $50,000 a year or less, and you've got to cover at least half the cost of health care for each of your employees.

And what if you don't comply? Well, then there are fines. If you employ 51 people and don't insure them, you pay at least $40,000 in fines. It's new rules, it's new mandates. Small business owners say they're concerned about the changes, yes. In a survey done by Sure Payroll, a quarter of small businesses said Obamacare would hurt them; 53 percent thought it would have no impact, while only 19 percent thought any impact would be good.

Yet, there's no solid evidence that small businesses are firing workers because of Obamacare. Of roughly 120 small businesses surveyed by CNN Money, none, none had fired a single employee because of the Affordable Care Act.

I want to bring in Ali Velshi, chief business correspondent, host of "YOUR MONEY." It's about as clear as it can be.

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Yes.

ROMANS: There's no real evidence that Obamacare or this health care law has caused anybody to fire anybody.

VELSHI: Right.

ROMANS: But small businesses are concerned.

VELSHI: Yes, but look, small businesses, very fairly, have reason to be concerned about a lot of things. They're concerned about uncertainty. Small businesses depend on the ability to plan for what's going to happen, and there was uncertainty about whether this law would take place. Now that this law has been approved by the Supreme Court, there's uncertainty as to whether --

ROMANS: Do you think it's a job-killer?

VELSHI: First of all, Michele Bachmann said, and she said it several times in that interview you used a clip of, millions of people, millions of jobs, and millions of businesses. We hardly lost millions of jobs in the entire financial crisis. That's just entirely, entirely false and untrue.

What would be better is to try and make people understand how they budget for this, how do they do this. There are definitely some businesses that will feel the impact of this, but it is not necessarily a job-killer.

ROMANS: So, here's -- if lawmakers spent half as much time educating their constituents on how to meet the new rules and mandates --

VELSHI: Right.

ROMANS: -- as just saying this is going to kill you as a business --

VELSHI: Right.

ROMANS: -- we'd be better off?

VELSHI: Well, you can apply that to pretty much anything we ever discuss. Right? If lawmakers spent more time -- and the administration, by the way --

ROMANS: I've been calling politics a preexisting condition.

VELSHI: I will tell you, I will say this, this I think the Republican rhetoric is remarkable on this, and they should stop and start doing something else, but the administration dropped the ball on this the minute they announced health care. They should have said much more clearly, it's there. You can dig around on the Internet, you can find it.

ROMANS: One team has a honed message and one doesn't, and that's been the case since the beginning.

VELSHI: Right, the honed message is not correct. So the bottom line is businesses have to plan for something, right? They have to plan. You can't run a business on the basis of what the next three months are going to be. So, they should plan for what their costs will be as you just described, and worry less about whether or not it's going to kill jobs. For an independent business, the small business, you can't worry about the macro as much as you've got to worry about what faces you.

ROMANS: And demand, it's about demand. They want demand.

VELSHI: Now.

ROMANS: They want demand.

VELSHI: The net effect of this health care law, if it is done the way it's supposed to be done, might actually create demand. It might actually put more money in people's pockets. We're yet to see all of this stuff, but I would just wish the conversation would switch from the one that it is, about how this is a massive job-killer, into what impact it's actually going to have.

ROMANS: All right, Ali Velshi, have a nice weekend, Ali.

Before we leave, I wanted to share with you some points that have become lost in the ugly politics of the Obamacare debate, a debate that's totally swamped some very important challenges we still have in health care. This is the beginning, not the end, of an important national mission to fix a bloated and inconsistent bureaucracy.

Here's what the ugly debate did not settle. This was always meant to increase coverage, access to health insurance. It doesn't mean lower costs or better health. Here is still what we have to do. There's no meaningful malpractice reform. Insurance companies are not forced to compete on state lines. There was no meaningful discussion of end-of- life issues at a time when we have an aging population. Instead, we're at a moment in American politics where this complicated and emotional issue is reduced to a death panel bumper sticker. 75 percent of health care costs are associated with lifestyle choices, by some estimates. How do we incentivize people to take better care of themselves? Consumers still have no idea how to bring their own costs down. When you purchase a health service, how do you begin to understand what you're about to get? And understanding the cost is simply impossible.

Health care is the largest single industry in America, one-eighth of our economy is health care. This is just the beginning, not the end.

Share your opinions on this landmark decision with us. Find us on Facebook, or Twitter. Our handle is cnnbottomline, my handle is @christineromans. Have a great weekend.