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YOUR MONEY

Obamacare to Begin Enrollment in Exchanges; U.S. Government Faces Shutdown and Debt Ceiling Crisis; Study Looks at Electronic Devise Use on Airplanes

Aired September 28, 2013 - 14:00   ET

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


CHRISTINE ROMANS, CNN HOST: And on state based exchanges enrollment begins on October 1st, coverage starts January 1st, by March 31st, just about everyone must have health insurance or they will pay a penalty. And everyone, no matter how sick, must be able to get coverage.

Bob Funk runs express employment professionals. That company places 5,000 people with jobs every year. Funk says the Affordable Care Act is good for his business, but it's bad for workers who want full-time positions.

(BEGIN VIDEO CLIP)

BOB FUNK, CEO, EXPRESS EMPLOYMENT PROFESSIONALS: Companies are fearful of hiring anyone on a permanent basis anymore because of the fear of what the cost is going to be.

(END VIDEO CLIP)

ROMANS: Companies have been relying more on part-time workers long before since Obamacare became law, but it is true that the law is raising costs on employers. Some companies are responding by cutting back on benefits or passing the cost increases to their workers. CNN's chief medical correspondent Sanjay Gupta is here with us to explain all these changes. Sanjay?

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: We're hearing a lot these days from companies who say that Obamacare is forcing them to make some changes. To give you a couple examples, even one a little different, Delta Airlines, they said the law will add $100 million to their health care costs just next year, that's what they're telling us. One piece of that, the example they're citing, is it's going to cost an extra $14 million to have young adults added to their parents' plans. Remember the law says people under 26 can stay on their parents' plans. It's very popular, but it isn't free. That's what Delta's saying.

UPS is also blaming Obamacare when they said that they're dropping coverage for about 15,000 spouses. It's worth pointing out those are people who already have coverage through their own other jobs. But Home Depot dropped coverage for about 20,000 part-time workers. The limited plans that these part time workers had, they are no longer legal, so Home Depot was forced to do this. Now, those workers should be OK because most of them will be eligible for subsidies and they can take the monies from the premiums at Home Depot and put it into the federal marketplace.

A lot of this is confusing and may even sound alarming to people, but don't look at it in a vacuum. There's been this trend for higher costs and fewer benefits for quite some time now.

ROMANS: Thanks, Sanjay.

There are four tiers plus a low-cost catastrophic option for people under 30. Bronze plans cover 60 percent of costs all the way up to 90 percent for the platinum plans. Depending on your income, the government may pick up some of your costs for your plan. If you're a single person making less than $46,000 a year or a family of four, $94,000, you're likely qualify for a government subsidy. The prices also depend on where you live and how old you are, wide variability around the country.

So let me show you a few examples. A single person living in Mississippi who makes $25,000 a year, pays $75 a month after subsidies for the bronze plan, a family of four making $50,000 a year would pay about $282 a month for the silver plan. Again, that's after subsidies.

Let's take a look at Arizona, for example. That same 27 year old would $120 a month. That family of four would pay $282. So you could end up paying less or more than today. We don't know quite yet. It will depend on your particular case.

The administration making a big push to educate you all around the country about exactly these issues, the changes and how to sign up. The comedy website "Funny or Die" has created videos, Walgreens is handing out pamphlets, and ad campaigns are targeting moms. And if none of that works, volunteers will come to your door to explain the benefits.

But our own Zain Asher found that with all of that outreach, it may not be working, or at least it's a big, big job. Zain, a lot of people don't know what health care coverage they have now. What did they find?

ZAIN ASHER, CNN BUSINESS CORRESPONDENT: Hi, Christine. We found that very few people even know what Obamacare even means. Yes, these exchanges open on Tuesday and nonprofit groups are going door to door trying to explain Obamacare to the uninsured. We spoke to several uninsured Americans who know virtually nothing about what Obamacare even means. Take a listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: We'll start at the top of the hill.

ASHER: With just a few days to go before the new health insurance exchanges go live, an army of Obamacare experts are going door to door. UNIDENTIFIED FEMALE: Good morning. Is Christopher home?

UNIDENTIFIED FEMALE: We're not selling anything.

UNIDENTIFIED FEMALE: Do you currently have insurance?

ASHER: Trying to explain Obamacare to Americans who don't have health insurance.

MAHER HAMOUI, UNINSURED: I know it has to do with caring about people, you know, Obamacare, so basically that's all I know.

ASHER: According to the Kaiser Family Foundation, 43 percent of uninsured Americans still have no idea about the new exchanges.

JOSE MENENDEZ, LEARNED ABOUT OBAMACARE FOR THE FIRST TIME: I have a question. Who created this affordable health care plan?

UNIDENTIFIED FEMALE: Well, this was passed by congress.

MENENDEZ: Oh, Congress created it.

UNIDENTIFIED FEMALE: Yes, the Affordable Care Act, yes.

MENENDEZ: And I'm just wondering as a citizen of America, how come I did not hear of this?

ASHER: Well, health care reform is a frequent source of contention in Congress, many of the people we spoke to in New Jersey were hearing details of Obamacare for the very first time just this week.

UNIDENTIFIED MALE: I'm definitely going to read into it.

MENENDEZ: Is Obama forcing Americans to get health insurance? It sounds that why.

ASHER: Enroll America, a nonprofit group funded mainly by insurance companies, health care groups, and charities is working to spread the word, dispatching 130 field workers in ten states.

UNIDENTIFIED FEMALE: We can follow up with you.

ASHER: On October 1st, 48 million uninsured Americans will be able to purchase health coverage through federal in state exchanges. Coverage starts January 1st, and they must enroll before March 31st.

BARACK OBAMA, (D) PRESIDENT OF THE UNITED STATES: They'll be able to shop, just like you shop for an airline ticket or a flat-screen TV, and see what's the best price for you.

HAMOUI: This is all new to me. I never knew about any of this.

(END VIDEOTAPE)

ASHER: I think part of the problem is people sort of see the word Obamacare tossed around in the news, but they have idea what it actually means. Obviously it is complicated. But people were literally coming up to me in the street thanking me for doing this story because they had no clue they would soon have to buy health insurance.

ROMANS: You know how terrifying it is to do open enrollment at work, for example. Imagine having no exposure to the market, you're uninsured. They have a lot of work ahead of them. Zain, thank you so much.

Coming up, terrorists won't stop planning attacks on America, even if the government shuts down. Last weeks' vicious attack on a Kenyan mall, is the latest reminder of the threat all around us. But is bickering over budgets sending a dangerous message to America's enemies? Fareed Zakaria is next.

(COMMERCIAL BREAK)

ROMANS: Dysfunction in Washington, the country on the verge of a government shutdown, a self-inflicted wound that risks damaging the still fragile American economy. Meanwhile this week the president of the United States addressing the United Nations, carefully laying out America's policies and interests in Syria, Iran, and the Middle East peace process.

Compare that to what was happening back in Washington, a fight over Obamacare that could shut down the government, but it won't stop Obamacare.

Fareed Zakaria is host of CNN's "FAREED ZAKARIA GPS." Fareed, thanks for being here. The president former defense secretary Leon Panetta spelled out the price of governing from crisis to crisis. He wrote recently in an op-ed, "U.S. citizens will lose truth in our system of governing and the world will view the United States as less able to back its word with power."

How much does this eternal internal struggle in Washington damage us in the eyes of the world.

FAREED ZAKARIA, CNN HOST, "FAREED ZAKARIA GPS": I think it does. Right now we don't have a competitor. And so it seems as though we can careen from crisis to crisis and there really doesn't seem to be much of a price to pay. The American economy, the recovery is continuing.

But there are two areas -- first is the credibility of American government. We benefit enormously from the fact that the dollar is the reserve currency of the world and our treasury bills are the reserve investments of the world. If that changes, if people start worrying about getting repaid, as they should frankly worry, given what we're doing, that would change things dramatically. It raises huge costs for the United States.

The second is, in all this crisis management, nobody is talking about what we should be doing for the long term in this country. We are seriously underfunding investments in education, in infrastructure, in basic science. That's the seed capital that produces growth. You know, we had these slogans where people said it's not about big government or small government. It's about smart government. Right now what we are doing is stupid government.

ROMANS: And when you look at how petty and stupid it is in Washington, and sometimes there's a news event around the world that really puts it in perspective. For example, more than 60 people killed in Kenya, terrorists attacking a mall, raising a lot of fears about soft targets around the world and here in the United States. And the Al Qaeda leader Ayman al Zawahiri said he's encouraged his followers to force the United States to spend more on security in order to, quote, "bleed America economically." Does all this fighting over the budget telegraph an economic vulnerability?

ZAKARIA: I think people see that we're dysfunctional. They see that we can't get our act together, we don't have a strategic plan. I wouldn't worry too much about Zawahiri. He hasn't been able to orchestrate anything in years. Al Qaeda central, the guys that planned 9/11, are really on their heels. We've pushed them back. He's trying to get something going. He knows the only thing he can do, really, is try to encourage somebody out there to walk into a mall because he can't plan any of it.

And by the way, I hate to put it this way. If we spent more on security right now, it would be good with the economy. What the economy needs is more spending and more consumption.

ROMANS: I want to switch gears and talk about something John McCain said recently. Russia's leader, Vladimir Putin, he recently criticized the president and his policies, and he did that directly to the American people. And then the president's 2008 Republican opponent, Senator John McCain, responded with an anti-Putin op-ed to the Russian people. He said this, "I believe you deserve the opportunity to improve your lives in an economy that's built to last and benefit the many, not just the powerful few."

He was writing to the Russian people about an economy that benefits everybody. And we look at these statistics. In 1989, the year the Berlin Wall fell, the ratio of CEO compensation to the average worker was 58 to one. Last year it was 273 to one. The poverty rate in '89 was 12.8 percent. Last year it was 15 percent. The typical American family now makes less than it did in 1989, Fareed. Was John McCain, his lecturing Russia about its economy and its fairness, but a lot of people at home here are saying, wait, I don't feel like this economy is fair for me.

ZAKARIA: Look, we're a lot better off than Russia, but I think your point is valid. Part of this is broad structural trends. There's globalization, technological change, the rise of the knowledge economy, all that creates a winner take all system. And the successful CEOs tend to do very well, partly because their compensation is tied to the stock which rises.

But that's all the more reason why we should be making public investments in education, in daycare, in things that can help people move up the ladder of opportunity. I don't begrudge CEOs doing very well, but I want to make sure that anyone can get to be a CEO and the game is not set so that if you get to school when you're six years old and you're malnutritioned and you haven't had any kind of pre-k, we know you're not going to do well in school, and you won't get into a good college. That's the trend we have to stop.

Again, as I say, part of is that our stupid government, that is the inability to get anything done means we don't invest. We don't spend much more on people in America. We think we do. We spend a lot on the middle class. We have lots of subsidies.

ROMANS: Tax breaks.

ZAKARIA: And a bunch on the rich, but the poor are actually neglected, and it's something of a scandal.

ROMANS: One of the thing it's clear is the country with the most prepared and best educated workforce is the one that will win -- the next leader. Are we investing in our workforce?

ZAKARIA: We're not at all in the sense that what does it mean to have a good workforce? It means you need to have them educated, and you need to have the ability to retrain them because some jobs are going to go away, some industries are going away. We do early education very badly. We do secondary education badly, and we do job training badly. And in all these cases, while there are lots of reforms that need to take place, it's also true that you just have to spend more money on some of the areas we're not spending it, and I can't see Washington doing that right now.

ROMANS: I can't see them doing anything but politics by the minute. Fareed Zakaria, it's nice to see you. Thank you.

ZAKARIA: A pleasure.

ROMANS: Ready to be stuck in the middle seat of your flight listening to the guy next to you talking on the phone or playing Angry Birds? Oh, lord. The FAA moved one step closer to allowing the use of electronic devices in flight during takeoff and landing. But forget annoying. Is this safe? We're going to tell you if it's safe to have somebody playing Angry Birds on takeoff to landing. That's next.

(COMMERCIAL BREAK)

ROMANS: You and your fees went flying this year. A record year for airline fees, but there are still some deals if you know where to look. More than $27 billion, with a "b," generated from your pocket to the airlines from those a la cart fees. That's more than we spend on the entire budget of NASA.

So where is this money coming from? It's coming from your pocket. It is the money you pay for roomier seats, for checked bags, early bird boarding, and rebooking your flights. With costs rising for airlines many are now relying on these fees for a huge share of their revenue. But some airlines hit you harder than others for these extras.

Let me give you an example. Let's talk about JetBlue here. They will let you carry on one bag for free. Southwest will give you two. Look at spirit, $100 to carry on a bag if it doesn't fit under your seat. It actually makes about 40 percent of its revenue from exactly those kinds of fees. Bottom line, you need to factor in these extra charges when you're looking at fares.

If you want to be extra savvy, Fare Compare tells us the cheapest days to fly are Tuesday, Wednesday, and Saturday. The cheapest times are when no one else wants to go, very early flights. The best time to buy a ticket, Tuesdays at 3:00 p.m. Book now. An analysis of last year's fares by travel site Kayak.com found you have about three more weeks better prices start to rise.

Once in the sky, you need to follow the airline's rules. Almost one- third of airline passengers reported that they left on a portable electronic device in flight when they went to post. That has the FAA concerned, but can a Bluetooth really bring down an airplane. Renee Marsh, aviation and government regulation correspondent joins me know. Renee?

RENEE MARSH, CNN AVIATION AND GOVERNMENT REGULATION CORRESPONDENT: That's right Christine. It's the rule at takeoff and touchdown, turn off all electronics. The FAA expects to get recommendations from an advisory group this Monday that could change that rule, but you ask the question, can our devices really take down a plane or even call serious safety issues during flight? We traveled across country to one of the largest manufacturers of commercial airplanes to find out.

(BEGIN VIDEOTAPE)

MARSH: This fall the FAA could decide to relax those restrictions. At Boeing's plant in Seattle, we asked the people who build the place if it's dangerous to keep devices on during all phases of flight.

KENNY KIRCHOFF, BOEING ENGINEER: L The emissions are being measured by this antenna here.

MARSH: Inside Boeing's electro-magnetic interference lab, engineers have been studying the issue for years, testing cellphones, laptops, and tablets' impact on airplane systems. Engineer Kenny Kirchoff tested my cellphone.

KIRCHOFF: This phone is communicating with the cell tower, and these spikes show it has failed.

MARSH: Its emissions cross the threshold and could interfere with systems like the plane's smoke alarm. Next test, a laptop.

KIRCHOFF: It goes above the limit line.

MARSH: It failed, showing potential interference with the pilot's communications radios. A tablet in Wi-Fi also failed. But the same tablet in airport mode tested safe.

KIRCHOFF: It's not necessarily that a phone can bring down an airplane. The issue is interfering with the airplane and causing more work for pilots during critical phases of flight. MARSH: A recent survey found one in three passengers left their devices on because they forgot. Despite that engineers say no electronic device has ever taken down a plane.

New planes are being built knowing passengers are flying with electronics and they want to use them. So planes like this one, being designed with technology that can counter interference.

Kirchoff recommends devices not be used in flight unless the airplane has been tested against every possible electronic device that could be used onboard. And he says there's another problem.

KIRCHOFF: You would be asking all the flight attendance to monitor which devices are good and which devices can't be used. And that's a heavy burden for flight attendants.

MARSH: A burden he says is impractical.

(END VIDEOTAPE)

MARSH: Once the FAA receives that panel's recommendations on Monday, the FAA will make the final decision on whether to loosen the restrictions. But individual airlines do not have to agree to adopt those restrictions. Christine?

ROMANS: Fascinating piece, thank you, Rene.

Ever wish you could have your fries and your figure? Why you can have it your way, next.

(COMMERCIAL BREAK)

ROMANS: This house up for sale has drawn a lot of attention. It might not look like much, but it's the childhood home of rock legend Kurt Cobain. Cobain's family listed the residence in Aberdeen, Washington, for $500,000.

For more stories that matter to your money, give me 60 seconds on the clock. It's "Money" time.

(BEGIN VIDEOTAPE)

ROMANS: Illegal immigration is on the rise after falling during the recession. The attraction -- low-wage jobs are being added. There's also optimism that Congress will eventually reform immigration and provide a pathway to citizenship.

More happy housing news, home prices jumped 12.4 percent from a year ago, and even with rising mortgage rates, new home sales climbed eight percent in August.

Apple hits a high, BlackBerry hits a low. Apple announced a record 9 million iPhone 5S and 5C sold in the first weekend. Apple stock soared on the news. But BlackBerry shares won't be around much longer. The company is going private for $9 a share. Just five years BlackBerry had more than half the smartphone market, today, two percent.

Chrysler is going public. The American automaker filed for an IPO this week. The company has made quite a comeback since going bankrupt in 2009.

New French fries that might not make you fat. Burger King is offering crinkle cut fries, 40 percent less fat, 30 percent fewer calories than McDonald's fries. The catch, they're slightly pricier than the original.

(END VIDEOTAPE)

ROMANS: Less fat, does that mean less taste? I did the legwork. I've got to tell you, not too bad. McDonald's is also on board for healthier options. This week we learned they'll forget the fries, well, sometimes. You can swap them out for a side salad, fruit, or vegetables in the value meal.

Thanks for joining us this week on "YOUR MONEY." Head to CNNMoney.com to find out why Al Gore says we not only have a climate crisis, we have a democracy crisis.

(BEGIN VIDEO CLIP)

AL GORE, FORMER U.S. VICE PRESIDENT: Special interests have been able to use massive amounts of money lobbying to hotwire or hack the way the system operates.

(END VIDEO CLIP)

ROMANS: Head to CNNMoney.com for Evelyn Kurtz's revealing sit down with Al Gore. Stay tuned for "YOUR MONEY," the latest on the countdown to the shutdown. It looks like we have some very late nights in store. Stay tuned.