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In round two of our debate with Dr. Margaret Flowers and economist Dean Baker, we discuss whether CBO’s prediction that Obamacare will trigger reduction of work hours will negatively affect workers


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JESSICA DESVARIEUX, TRNN PRODUCER: Welcome to The Real News Network. I’m Jessica Desvarieux in Baltimore.

If you’re one of the 48 million Americans who is uninsured, the time to sign up for insurance is winding down. March 31 is the deadline to get insurance under the Affordable Care Act, and according to the latest Associated Press GfK Poll, only 25 percent of uninsured Americans have even tried to sign up through the state or federal insurance exchanges as of late January. If folks don’t enroll in time, many will face a tax penalty and be blocked out of the subsidized plans until next year.

Here to discuss Obamacare in the second round of our debate are our two guests.

Dr. Margaret Flowers is a pediatrician in the Maryland Chapter of Physicians for a National Health Program cochair, and she’s also the secretary of health for the Green Shadow Cabinet.

And joining us from Washington, D.C., is Dean Baker. He’s the codirector of the Center for Economic and Policy Research.

Thank you both for joining us.

DEAN BAKER, CODIRECTOR, CENTER FOR ECONOMIC AND POLICY RESEARCH: Thanks for having me on.

DR. MARGARET FLOWERS, PHYSICIANS FOR A NATIONAL HEALTH PROGRAM: Thank you for having us.

DESVARIEUX: So, Margaret and Dean, we had quite a spirited debate last time about Obamacare as a policy. But now that we have a better sense of its progress, we can speak more specifically to the reality of the policy.

The administration had originally hoped to get about 7 million people to sign up for coverage. It lowered its numbers to 6 million after the site had those technical issues. And now there’s really been a push to try to get young and healthy people to sign up. In particular we’re talking about those people so they can balance the system, as they put it, so there’s not only sick people in the exchanges.

So, Dean, I want to start off by asking you, why aren’t more people signing up or, in some cases, able to sign up? I know that you want single-payer, you both want single-payer systems. So is it necessarily a bad thing that more people aren’t signing up for these exchanges?

BAKER: Well, I think people–I think it’s good for people that have insurance. So in that sense I think it’s probably better they sign up than they don’t.

A lot of the stories about the exchanges really have been misrepresented. I mean, the issue about young, it’s kind of painful to me. It really doesn’t matter whether we get young people to sign up. You need healthy people to sign up. It really doesn’t matter. And most older people are actually healthy. So, you know, this issue that the young invincibles, it really is just a lot of seriousness, and it’s kind of embarrassing how that’s been proliferated through the media for, really, years.

But in any case, you know, I think if good people have insurance, so better more of them sign up or not. But I don’t–you know, nothing lives or dies with whether more people sign up.

DESVARIEUX: Margaret, what’s your take on this? Do you think more people should be signing up for these exchanges?

FLOWERS: Well, I think this whole discussion about whether or not young people are signing up is a distraction from the real conversation that we should be having. It’s an attempt to put the blame on, you know, those healthy people who aren’t signing up for these insurance plans, and they’re the reason that we’re in this–you know, the sytem’s going to fail.

The system’s going to fail because it’s too complex. It’s designed to fail. It’s really designed to protect the profits of insurance companies and not make sure that our health outcome get better. So this whole term–young, invincible–that’s something that was created to make people rationalize blaming our failures on young people.

Why are they not signing up? We have outrageous college debt right now. We have a very poor job market. So many people, you know, especially young people, are not able to find jobs so that they can afford to sign up for these plans.

But I think what we need to discuss that’s more important than how many people get insurance is whether people can get access to care, whether they’re going to go bankrupt if they have a serious illness, and whether our health outcomes are going to improve. And those are the things that we should be talking about, not just how many people are insured.

DESVARIEUX: Alright. Dean, I want to speak specifically to the Congressional Budget Offices numbers that came out about the Affordable Care Act, and I know you wrote a piece titled “The Good Jobs News on the Affordable Care Act”. So, essentially, what’s the good news?

BAKER: Well, the good news is that a lot of people are going to decide that because they can now get insurance outside of the workplace, that they’re going to decide not to work. That was what the Congressional Budget Office report showed. And while the Republicans were running with this, saying, oh, 2 million people are going to lose their jobs, then it was exactly the opposite. What the study said was that based on a lot of research–and I’m familiar with this research; I think if anything [inaud.] conservative–but based on a lot of research, we’re going to have somewhere around 2 million people who are working today who are going to say, okay, because I can get insurance through the exchanges, I don’t have to get them through my job, I don’t have to work. So these are going to be a lot of people with–parents with young kids who’d rather stay at home or work part-time. You’ll have a lot of people nearing retirement age who don’t need to qualify for Medicare are going to take advantage of the opportunity to get insurance through the exchanges–again, work part-time, or in some cases just retire early.

And you have a lot of people who are ill. It’s really striking in the current system, of course, that if you have insurance through your job, you have a lot of people who are suffering from, you know, cancer or other serious diseases, and they’re stuck, they have to stay at work, because that’s the only way they can get insurance. So in many cases you’ll see those people take advantage of the opportunity to get insurance through the exchange that they’re going to find affordable. So in that sense, I see see that it’s great.

And sort of a flip off of that, that, you know, I did a little–we did a little research on here is that this–I hate to say it, but it might be the only way you’re going to see an increase in wages, because what happens is people leave the labor market, you reduce the supply of labor. That puts upward pressure on wages. And interestingly, we’ve sort of had an opposite test of this in Tennessee back in 2005. They had an Obamacare type program in place that they ended. They had a budget cutback and they ended Obamacare-type program. And that led to a lot more people entering the labor market, and it led to a fall in wages in Tennessee. So if we reversed that, that might mean a modest increase in wages. So that’s kind of good news. So I consider that all very positive.

DESVARIEUX: Margaret, I know that you read that same report. Are you as positive as Dean is?

FLOWERS: No, I didn’t actually see what Dean is saying in that report at all. What it said was that people may voluntarily choose to restrict their hours so that their incomes don’t rise so much that they no longer qualify for subsidies. You know, so many out of the people that are getting insurance are people that are getting it because they’re providing public dollars to subsidize the purchase of private insurance. And we saw this in Massachusetts, and still see it where people know that, you know, if they go $1 above what the limit is when you no longer get a subsidy, your out-of-pocket costs can rise dramatically. I mean, just looking at people who are up at the top level, 400 percent of the federal poverty level, make pay on average $17,000 a year for health care. And if they go $1 over that level, suddenly it’s $27,000 a year. So that’s a huge difference [incompr.] especially if they have families and they have to pay for college and things like that. So this is really people restricting their hours so that they can continue to get [incompr.] to get health insurance.

And then the CBO report said that they expected compensation to decrease by 1 percent, and that if the Affordable Care Act had not been enacted, there would be less of a decrease in compensation. And they said that they didn’t expect their–. Because there’s such glut right now, we have so many people unemployed, that if someone reduces their hours, there are many more people out there that are needing jobs and are ready to step right in there. So I think that analysis of looking at Tennessee and saying, well, in 2005, because they had more people seeking work, wages went down, that suddenly when we have, you know, more work available, wages are going to go up, in the face of so many people unemployed I just don’t see that happening.

DESVARIEUX: Dean, I have to let yo respond.

BAKER: Yeah, actually, that report said the opposite, Margaret. If you look at it, it said that they expected hours to fall by 2 percent, compensation to fall by 1 percent. That’s a projection of a 1 percent increase in pay. But on top of that, they cite a lot of research.

And, actually, a relatively small number of people are going to find themselves at those cutoffs. It’s unfortunate you have those cutoffs, but the idea that you’re going to have millions of people right at those cutoffs, that’s a little hard to believe, and the research they cite isn’t looking at that at all.

FLOWERS: Well, they didn’t say anything about people leaving their jobs because they wanted to go spend more time with their family. And I don’t see how–they did not make the–the report specifically said they’re looking at a 1 percent fall in compensation, and so I don’t see how you can make those numbers match up.

BAKER: No, it actually says the 2 percent fall in hours. I could assure you of that. So a 1 percent fall in compensation, 2 percent fall in hours means a 1 percent increase in hourly pay.

FLOWERS: That doesn’t necessarily mean that employers are going to raise pay when there’s a glut of people out there in the employment market [crosstalk]

BAKER: [crosstalk] that’s what’s in this CBO report. That was what was in the report.

DESVARIEUX: Okay. I don’t actually have the report right in front of me, but we’ll certainly look into it, and we can address that issue at another time.

But, Margaret, you’ve talked about your perfect model for Medicare would be Medicare for all, essentially. But could we even pass it, especially with the Republicans in the House? And now even if the Democrats had control of both houses of Congress, would they even be interested in passing Medicare for all? So, essentially, is it even realistic to say Medicare for all at this stage?

FLOWERS: I think it’s absolutely realistic to say Medicare for all, because it’s the only solution that’s actually going to solve our health-care crisis, make health care accessible to every person who needs, it, and control our health care costs, which are dragging down the entire economy. So from a standpoint of, you know, what works and what doesn’t work, we need to be talking about a Medicare for all.

In terms of political feasibility, that’s something that changes. You know, the political mood changes with where the people are. And so we saw in 2009, as a perfect example, that the problem wasn’t the Republicans. At that point, we had a Democrat in the House who–and Democrats in the House , Democrats in the Senate, and a Democratic president who understands what single-payer is and had supported it as a state senator, and yet it was still kept off of the table.

So what that points to is that the problem is both of our corporate political parties are influenced by the industries that are, you know, basically financing their campaigns, and that we’re not going to see this coming from Congress initiating it. It’s going to have to come from the people initiating it. And that means a mass mobilization, an organization to make that [incompr.] is the only way we’re ever going to get real health reform. And we’ve seen it work in the past, and so we know that if we do it, we can make it work in the future.

DESVARIEUX: Dean, do you agree that Medicare for all is the only way to really solve our health care crisis?

BAKER: Well, I’d love to see Medicare for all, but I have to say–I mean, Margaret’s points are very well taken. We were nowhere close to getting it even back in 2009 when you had Democrats controlling both houses and a Democrat in the White House. So, you know, the reality is we’re not going to see this anywhere soon. I know a lot of great people who have been working for universal Medicare for the last quarter century, and I don’t see any reason to believe they couldn’t work for next quarter century and still not get it.

So I think what we have to do is say, okay, we have to give people care, we have to extend coverage, we have to try and lower costs, lower doctors’ pay. Our doctors get paid twice as much as doctors in other wealthy countries. We can’t afford that. We pay way too much for drugs. We have a horrible way of supporting research in prescription drugs. We have to change that. Drugs should be cheap. They are cheap. So we have to make lots of changes.

And, you know, again, look, I’d love to see universal Medicare, but I just–you know, for exactly the reasons Margaret was saying: the other side is too much money. We’re not close.

DESVARIEUX: Alright. Margaret, what’s your take on that? Do you see there being any virtues in Obamacare?

FLOWERS: Just the Affordable Care Act has actually taken us in the opposite direction. Instead of taking our public dollars and using them to create a public health system or to expand the public health systems that we have so that we can provide more care, we’re actually feeding more of our public dollars into these private industries who are actually using the opposite of what’s proven to be effective. So instead of everybody having access to care, we have means testing, which means it’s based on how much you make, what you qualify for. And that makes the system very complex, and it makes it so that if people fall in and out of care when their eligibility changes, we’ve created, instead of a single standard of care where everybody has access to high quality care, a class-based system through the tiers in the health insurance exchanges, so that people get the amount of health care that they can afford. We’ve actually, as I said, transferred all this wealth into the private industry, and we haven’t changed their behavior. These private insurance companies exist to extract profits. So any money that goes in, they’re always going to take a portion for themselves and try to pay as least out as they can. And we haven’t changed that. So while we may be saying, well, you have to cover these certain levels of care, what they’re doing is they’re always figuring out ways to get around that.

And the current way is that they restrict the networks. So if you look at the insurance plans that are being offered through these exchanges, the vast majority of them are what we call narrow or ultra-narrow networks, so that you may have an insurance plan in your city, but 30 to 70 percent of the hospitals in that city may not even be in that plan. So what happens if you’re walking down the street and you get hit by a car and the ambulance takes you to one of those hospitals that’s not in your plan? You have to bear 100 percent of that cost.

So we’ve just–it’s a perversion. This whole system has been designed to protect the profits of the insurance industries. It’s not been designed to actually improve our health or control the costs of our health care in this country. So that takes us in the wrong direction.

DESVARIEUX: Dean, is that true, this is essentially profits over people?

BAKER: Well, this is a mixed bag. I mean, this is what you get through when we’re nowhere close to being able to push through a bitter program. So what we have is a situation where it’s mixed for the insurance industry. They lost $150 billion in money going through Medicare Advantage, the private portion of Medicare program.

But, you know, the main point, to my mind, is that this guarantees people that they can get insurance. So you have tens of millions of people–and I can refer, you know, to my own situation with my wife. She has a chronic health condition. She gets insurance through me at my workplace. But if something were to happen to me or if I were to end up losing my job, there’s no way she’d insurance on the private market for Obamacare. Now she’ll be able to get it through the exchanges.

And, yeah, insurance isn’t perfect and the insurance we have now isn’t perfect, but, you know, the reality is absent Obamacare we would have no security. With the exchanges, we actually have a fair degree of security. So that makes a huge difference in the lives of tens of millions of people.

And I’m really hard-pressed to tell all these people, well, until you get single-player you’re out of luck. I mean, the reality is most people do get their health care through insurance right. That might not be good, but that is the reality. And if they don’t get it through insurance, they don’t get it. So, again, I don’t see that as being a loser.

DESVARIEUX: Dean, can you speak specifically to Margaret’s point, though, about people are only going to get care based on how much they can afford?

BAKER: Well, there’s differences in what they pay. That’s right. That’s absolutely true. If you can afford, you know, a better-cost plan, you’re likely to get better treatment. That’s true. That’s the way it was before. That’s the way it is now.

DESVARIEUX: Margaret–.

FLOWERS: And that’s what sets us apart from other industrialized nations is that our market-based system means that people can only get the amount of health care that they can afford.

The health insurance exchanges have just set up a system which is a pay-now or pay-later. If you buy the upper tier plans, you don’t get more access or more benefits than anybody in the lower-tier plan. It’s just you pay more up front so you don’t have to pay as much later. And people on the lower-tier plans are basically saying, well, I hope I’ll stay healthy. I can only afford to pay this little bit now. But if I get sick, I’m going to have a lot more out-of-pocket costs.

What those out-of-pocket costs do is they cause people to self-ration, so they don’t get the care that they need. Last year–this happens with people with insurance–they self-ration. In–well, in 2012–not last year, but in 2012, 80 million people in the United States went without necessary care because of the cost of care.

So what we’re doing is we’re taking–if we are supporting this system, we’re supporting further privatization of our health care. And so rather than telling people, this is the wrong system, we should even fight for a better one, people are saying, you know, go out and purchase health insurance and then hope that [if you do] get sick, that you’ll be able to go to the hospital where you can get the care, and you hopefully will be able to afford the out-of-pocket costs to get the care that you need. That’s ridiculous in a country that’s already spending two and a half times what other countries are [crosstalk]

DESVARIEUX: Margaret, I’ve got to let Dean jump in here.

BAKER: [crosstalk] wait forever to get single-payer, and until then you should die in the street. So what this is doing is [inaud.] a lot of people with insurance who don’t currently have it. That will provide care in a lot of cases where they would not currently have it. And to my mind that’s a very good outcome.

Now, it’s very far from perfect. That’s right. And we should fight to make that better. But I’m not going to tell people that they shouldn’t have insurance. I can’t see that being a very sensible proposition.

DESVARIEUX: Alright. I want to just pivot the conversation and discuss how people are waging this fight on a local level. Could cities or states that are fed up with the current system start their own model and do something like Medicare for all, for example? Margaret, can you speak to that?

FLOWERS: That’s a very complicated thing to do, partially because of the way that the rules are written. You have to get legislation through Congress to actually create a truly single-payer universal system at the state level. I know some local levels are trying it in some certain ways, like San Francisco did with the restaurant tax to provide single [incompr.] payer system.

But this is really going to happen most easily at the national level. And it can. I mean, during the health reform process, tens of millions of dollars were spent to buy off progressive organizations to get them to get people to fight for their own solution, to fight for a public option which is not single-payer. And those of us that continued to fight for single-payer with very little in the way of resources actually [incompr.] made quite a bit of progress. We actually got a single-payer bill to the floor of the Senate, and almost got one to the floor of the House. So that tells me that if we actually, as a people, have a political education to understand how the system works and doesn’t work, and we actually hold you to what we need to do and fight for that that we can win it.

DESVARIEUX: Dean, what’s your take on that? Could we be fighting more on a local level? Is that even feasible?

BAKER: Well, Vermont is moving towards a modified single-payer system. I don’t–I haven’t followed it that closely, so I don’t know exactly where they were standing, but I think they were looking to 2017 as the date for that to be put in place. And, obviously, we can look to try to modify, you know, portions of the bill as you go forward. You know, you have a lot of areas where there are very few competitors. It seems to me a great argument to let Medicare and Medicaid offer a plan in those areas.

Also, there are a lot of things that we can look to do, you know, for example, importing prescription drugs. You know, it’s ridiculous what we pay for prescription drugs. That’s kept high by, you know, government-guaranteed monopolies, patent monopolies. Drugs should be cheap. They’re cheap to produce. There’s no excuse for drugs costing hundreds, thousands of dollars a prescription.

We should try to bring down the cost of our doctors. You know, one in six people in the 1 percent are doctors. We can’t afford to pay our doctors twice as much as Germany, France, and every other wealthy country.

So there’s lots of things we could look to do, some at the federal and some at the state and local level. You know, again, I see this as a step forward. It’s very, very far from the final solution. But, you know, we have to keep fighting.

DESVARIEUX: Alright. Dr. Margaret Flowers and Dean Baker, thank you both for joining us.

BAKER: Thanks very much.

FLOWERS: Thank you, Jessica.

DESVARIEUX: And thank you for joining us on The Real News Network.

End

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Dean Baker is co-director of the Centre for Economic and Policy Research

Dr. Margaret Flowers is a pediatrician in the Baltimore area and a co-chair of the Maryland chapter of Physicians for a National Health Program (PNHP). She is also a Co-Director of PopularResistance.org and It's Our Economy. Flowers is currently running as a Green Party candidate for US Senate in the state of Maryland.