Pulitzer Prize-winning business columnist for the Los Angeles Times. His recent column was headlined "Why the New CBO Report on Obamacare is Good news." Hiltzik is also the author of The New Deal: A Modern History.
Obamacare is a job killer — that was the message across the media this week after the release of a new Congressional Budget Office report about the Affordable Care Act. But what does the CBO report really say? We speak to Pulitzer Prize-winning Los Angeles Times columnist Michael Hiltzik, who says detractors have misinterpreted a report that actually brought good news. That is not to say Obamacare does not have its drawbacks, which Hiltzik argues could be cured by a single-payer healthcare system.
JUAN GONZÁLEZ: We turn now to the latest controversy over "Obamacare." On Tuesday, the Congressional Budget Office released a 175-page report on the nation’s budget and economy over the next decade. The CBO report quickly became the top story of the day.
ALISYN CAMEROTA: We do begin with a Fox News alert: There is a bombshell new CBO report that finds Obamacare will be much worse for the economy than previously predicted. Welcome to HQ. I’m Alisyn Camerota.
BILL HEMMER: I’m Bill Hemmer. Nice to see you, Ali.
ALISYN CAMEROTA: You too, Bill.
BILL HEMMER: The effects over the next decade will be substantially larger than estimated, nearly three times larger. That adds a trillion dollars to the debt. It sheds 2.3 million jobs. And Lou Dobbs, host of Lou Dobbs Tonight on Fox Business Network, is here on this. Lou, good day to you. Wow.
LOU DOBBS: Bill.
BILL HEMMER: So this thing was dropped about 90 minutes ago.
LOU DOBBS: Right.
BILL HEMMER: I mean, what are we to think now? CBO, non-congressional, Congression Budget Office.
LOU DOBBS: Nonpartisan.
BILL HEMMER: Nonpartisan, I should say.
LOU DOBBS: Nonpartisan as it gets, Bill, as you’re saying. And what we’re looking at are just another round of devastating numbers for—for all Americans, because the result of this is there will be fewer jobs.
JUAN GONZÁLEZ: That was a Fox News report on Tuesday. Many other media organizations and right-wing pundits quickly claimed the CBO report proved the Affordable Care Act is a job killer. Many outlets claim the report found Obamacare would result in the loss of about 2.5 million full-time jobs. On the Washington Post website, Jennifer Rubin wrote the CBO report, quote, "confirms what critics have been saying all along: Obamacare is killing jobs and squelching growth."
AMY GOODMAN: But it turns out these initial media coverage misinterpreted the report’s actual findings. On Wednesday, the director of the Congressional Budget Office, Director Douglas Elmendorf, said the agency has found Obamacare, quote, "spurs employment and would reduce unemployment over the next few years."
Our first guest today, Michael Hiltzik, is a Pulitzer Prize-winning columnist at the Los Angeles Times. Earlier this week, he wrote a piece titled "Why the New CBO Report on Obamacare is Good News." He’s also argued many of the health law’s ailments could be cured by a single-payer system.
We’ll get to that in a moment, but, Michael Hiltzik, well, welcome to Democracy Now! Start off by just explaining what exactly this Congressional Budget Office report says.
MICHAEL HILTZIK: Well, it had a number of elements about the Affordable Care Act. It said, number one, that it found that the cost of providing affordable coverage and accessible coverage to Americans was lower than it had initially estimated. It found that the cost of insuring against risk by insurance companies that are participating in the Affordable Care Act is lower than it expected. In fact, that will—risk management will actually return a profit to the U.S. government. And it reaffirmed that this act is going to bring coverage to as many as 25 million Americans a year who might not otherwise have it. So, all of those elements obviously are great for Americans. It really shows that the ACA is working as it was anticipated to work.
JUAN GONZÁLEZ: But what about this confusion of the initial reports and the take that they had on the report, and this issue of the two-and-a-half million people who might choose to leave their jobs? Could you talk about that?
MICHAEL HILTZIK: Sure. This is a part of the ACA that the CBO talked about. It said that the equivalent of two-and-a-half million workers, by the year 2025, will—they’ll be cutting their hours or maybe leaving the workforce, many of them voluntarily. And that’s because what the ACA does is it defeats a phenomenon we call "job-lock." And that is that America is unique among developed countries in that if you lose your job, you lose your health coverage. Well, after the passage of the Affordable Care Act, that’s no longer the case, because you can now get affordable care regardless of pre-existing conditions. You can get it in the public market. You don’t have to worry about being turned down. You don’t have to worry about paying exorbitant premiums. And that means that you don’t have to worry about giving up your job or losing your job or cutting your hours. So you’re free to spend more time raising your family. You’re free to retire early, maybe before you get your full Social Security and before you’re eligible for Medicare. These are good things, because one thing that we’ve understood about the impact of losing your healthcare is that it forces people to stay in jobs that aren’t dignified, that aren’t the right jobs for them, that aren’t very well-paying, simply so that they have access to healthcare for themselves and their families. That’s no longer the case with the ACA.
AMY GOODMAN: I want to go to a clip from a press briefing on Tuesday when Jason Furman, chair of the White House Council of Economic [Advisers], explained the CBO report’s findings.
JASON FURMAN: In fact, what CBO found, and this is their summary quote near the top of Appendix C, again, quote, "The estimated reduction"—this is the reduction in the total quantity of labor that all of you have—all of you have seen and talked about. Quote, "The estimated reduction stems almost entirely from a net decline in the amount of labor that workers choose to supply, rather than from a net drop in business’ demand for labor."
What’s relevant about that is, their word itself is "choose." This is a choice on the part of workers. I have no doubt that if, for example, we got rid of Social Security and Medicare, there are many 95-year-olds that would choose to work more to avoid, you know, potentially starving or to give themselves an opportunity to get healthcare. I don’t think anyone would say that was a compelling argument to eliminate Social Security and Medicare. Similarly here, CBO’s analysis itself is about the choices that workers are making in the face of new options afforded to them by the Affordable Care Act, not something about firms destroying jobs.
AMY GOODMAN: Jason Furman, chair of the White House Council of Economic Advisers, explaining the CBO report’s findings. Michael Hiltzik, if you could expand from there?
MICHAEL HILTZIK: Yeah, I think what Furman was really talking about, the point he was making, is that the Affordable Care Act really is, at its core, social insurance, and it really is an extension and an expansion of the social insurance that we’ve had in this country since 1935 and the enactment of Social Security, and then, of course, in the '60s we got—we got Medicare. This is the next step. And he really is saying—and he's absolutely right—that one of the goals of the Affordable Care Act was to relieve Americans of this burden of having to work in bad jobs or in jobs that really interfere with their retirement or their family obligations just to get health insurance.
JUAN GONZÁLEZ: And, Michael Hiltzik, what does the report say about the other side of this, the actions of employers, of some employers possibly reducing the number of hours that they give to their workers in an effort to escape the mandates of the Affordable Care Act?
MICHAEL HILTZIK: Right. Well, this has been one of the canards about the Affordable Care Act that we hear a lot from the right, from conservatives and Republicans. They say that employers are cutting back full-time workers to part-time so that they can escape the mandates of that. We know from economists who have been studying this for years that that’s not the case. The CBO report underscores that.
It also finds that there’s absolutely no evidence that there’s been any sort of growth in part-time work at the expense of full-time work as a result of the Affordable Care Act. In fact, it reiterates what other economists have found, which is that, in fact, part-time work is growing at a smaller pace than full-time work. In other words, we’re getting more full-time employment in this country, relatively less part-time employment, and the part-time employment we’re getting is also voluntary. It’s people who don’t want to work a full day or full hours because they do have family obligations or other obligations. So the CBO really did confirm what everybody else has seen, and it should—in the real world or in a sane world, it should put to rest this idea that the Affordable Care Act is creating a horde of part-time workers.
AMY GOODMAN: If people want to work fewer hours, does it mean there will be more jobs available?
MICHAEL HILTZIK: Well, in fact, one of the things that the CBO report did say is that it expects that the ACA, to a certain extent, will spur more employment—in fact, the unemployment rate will come down—in part because people are leaving the workforce, but also because there’s going to be more demand for jobs, more demand for workers, especially in the healthcare field. This is all good. And the CBO report really says that this is good for employment across the country.
JUAN GONZÁLEZ: And what does it say also about this whole issue of the government turning a profit under the Affordable Care Act in the—for the upcoming years?
MICHAEL HILTZIK: Sure. This is—one of the elements of the Affordable Care Act, especially in the near term when insurance companies are feeling their way around the act and learning how to deal with what could be 30 million more customers, there are built-in sort of speed governors that ensure that insurance companies aren’t penalized for taking on riskier new customers—that is, older customers, sicker customers. These are known as—there’s reinsurance. There’s a phenomenon known as "risk corridors," in which companies that have unexpectedly high levels of riskier and more expensive customers will be subsidized by the government, and the government will, in return, charge companies that have better experience. They’ll have to pay a rebate back.
Now, in the past, the CBO has assumed that this will be neutral. In other words, there will be as much going out to help companies that have higher risk as come in from companies that have lower risk. What it found out or what it says in this latest report is, in fact, there’s going to be more money coming in from companies with lower risk than is going out to companies with higher risk, and that the difference is $8 billion over 10 years. That’s $8 billion that will come into the Treasury from the insurance industry to manage this risk. So, that actually is a profit to the government. And what’s important about that is that Republicans have been trying to kill this risk corridor provision in the ACA. They’ve been calling it a bailout of the insurance industry. And what we see now is that in fact if they kill it, that will be a cost to the government.
AMY GOODMAN: Michael Hiltzik, you have a new piece headlined "'Job-Lock' and the Republican Dilemma over Obamacare," and you cite a comment of Republican Congressmember Paul Ryan in 2009 about health insurance plans. This is a clip of what he said then.
REP. PAUL RYAN: The current tax treatment of healthcare, which is a relic of World War II, discriminates against the self-employed, against the unemployed and against those people who do not get health coverage at their jobs. This may have worked in America when everybody had the same job throughout their lives and throughout their careers. That’s not the America we have today. A lot of people change their jobs. So the tax benefit should change and go with them and not be attached to their jobs. We want to address job-lock. So, the key question that ought to be addressed in any healthcare reform legislation is: Are we going to continue job-lock, or are we going to allow individuals more choice and portability to fit the 21st century workforce? We propose to equalize the tax treatment of healthcare, giving every American, regardless of employment status, the ability to purchase health insurance. And if you like what you’ve got, you can keep it.
AMY GOODMAN: Michael Hiltzik, how does this compare to Republican Congressmember Paul Ryan’s position today?
MICHAEL HILTZIK: Well, I think Congressman Ryan still believes that job-lock is a bad thing, but because now job-lock is associated with the Affordable Care Act, which Republicans are supposed to detest, he’s had to change his tune a little bit. And we heard that in a hearing that he conducted just yesterday with Doug Elmendorf. Now, in the past, as you heard, Congressman Ryan and other Republicans have talked about job-lock preventing people from starting businesses, from going back and raising their families, retiring early—all these things that we know, that the CBO talked about. Well, because now that’s supposed to be bad—the departure of these workers from the workforce is now supposed to be bad, because it’s associated with the ACA, he’s sort of recharacterized them, and now he’s talking about them as though they’re just slackers waiting for a handout. And we heard this at the hearing yesterday when he talked about how, because these people are going to get a benefit from the Affordable Care Act, they’re going to give up the dignity of work. Now, of course, it really takes somebody sitting in the chairman’s seat of a Senate—of a House committee to not understand that a lot of work is undignified and that people are engaging in it simply because they need health insurance. But that’s what you’re hearing. You’re hearing a resurgence of this old, conservative shibboleth about the undeserving poor, and what they’re suggesting is that people who take advantage of the benefits of the Affordable Care Act to do something else with their lives than work in a soul-deadening job, well, they’re the undeserving poor. They’re just slackers. They’re slobs. They’re taking advantage of other taxpayers. And I think that’s really dishonest and unfair.
AMY GOODMAN: Michael, last night here in New York at this big Amnesty International concert that was honoring Pussy Riot, I interviewed George Gresham, president of 1199 SEIU. He was one of a number of public figures who spoke on the stage at the event.
AMY GOODMAN: If you are advocating single payer, a whole idea of a national healthcare plan, how do you expand the discussion beyond the Affordable Care Act?
GEORGE GRESHAM: Well, I think that’s a good point. I think, first, the Affordable Care Act has to succeed. I think people have to understand the advantage of this program, what it means to have affordable healthcare in this country. Then I think we can move to that next discussion. I do worry, though, that the reason the right wing is trying so hard to sabotage the Affordable Care Act, because I think they know the next logical conclusion after that would be a more expanded, universal health coverage, and which many of those legislators enjoy themselves.
AMY GOODMAN: That’s George Gresham, president of 1199 SEIU. He represents about 400,000 healthcare workers. Michael Hiltzik, you’ve written extensively about single payer. Is ACA, the Affordable Care Act, a stepping stone to single payer? Do you see that happening?
MICHAEL HILTZIK: Well, I see it happening, but that’s a very long-term project, unfortunately. What we’re seeing with the ACA is that it is a major step toward single payer. It doesn’t really bring us there. But what may happen over the next years—and it may take decades—is that people will come to the realization that all of the problems they see and that we see in the implementation of the Affordable Care Act are associated with the fact that the act puts the private, commercial health insurance industry at the center of delivering healthcare to Americans—in fact, more than it was even before the enactment of this act. So the health insurance industry is really the instrument of delivering the ACA to people. And all of the problems that we see, all of the difficulties with the federal government’s website, all of the confusion that we’re still hearing from patients and customers really has to do with the fact that we have left the delivery of healthcare in the hands of private insurers. And over time, I think, most Americans will come to realize that. And what will—what needs to happen will happen, and that’s to take private insurers, who impose an enormous cost on the delivery of healthcare, that they will go away. But as I said, that’s a long-term project. It’s going to take 10 years, really, 20 years, maybe even longer. There have to be a lot of changes in the American system that happen before that can happen.
JUAN GONZÁLEZ: Well, and, Michael Hiltzik, in that context, the—what’s happening with the existing private insurers, with the old—I guess you would call them the legacy health insurance programs that existed before the Affordable Care Act, sort of reinforced that. Anthem Blue Cross in California just announced a huge increase in their premiums for about 300,000 of their customers in California, 25 percent increase. So these companies are still hiking their premiums and making healthcare—health insurance increasingly unaffordable to—even to those Americans who have it now, because their—obviously, their companies that have to pay them, or they have to pay a portion of their premiums, as well.
MICHAEL HILTZIK: Right. And I think another thing we’ve seen is that there’s a real divergence in the costs that people are facing in the exchanges—that is, within the ACA—depending on where they live still. And that’s another artifact of this reliance on the private insurance industry. In some states and some communities, like in California, you see a fair amount of competition among insurance companies within the individual exchanges. In other states, you might see one company that really dominates the market. Those people are paying relatively higher premiums, even under the ACA, than in other states. And I think that’s going to be something that the American public begins to notice pretty strongly as the implementation of this act continues. And eventually, they’re going to see that the real answer, the only logical answer, for delivering healthcare is through a single-payer system.
AMY GOODMAN: Michael Hiltzik, we want to thank you for being with us, Pulitzer Prize-winning business columnist for the Los Angeles Times. We will link to your pieces. His recent one headlined "Why the New CBO Report on Obamacare is Good News," we’ll link to it on our website. Hiltzik is also the author of The New Deal: A Modern History. Stay with us, when we go to Greg Grandin next, The Empire of Necessity: Slavery, Freedom, and Deception in the New World. Stay with us.