tv Power Lunch CNBC May 4, 2017 1:00pm-3:01pm EDT
financials breaking out all of us on this desk. you have a couple of really important days coming here. the labor report tomorrow. that is going to be important. do we get the snapback from the 98 figure we saw last month? then obviously we have the sohn conversation, french elections. >> lot going on. >> thank you, brian. >> thank you all. that does it for "halftime." "power lunch" begins right now. tyler mathson here. welcome, erb. here is what is on the very jam packed busy menu for two hours. take two on health care. the house expected to vote on the republican plan in the next hour or so. even if it passes, it still faces major hurdles, of course, in the senate and elsewhere. we will break it all down with the ceo of a managed care provider become the role model for 21st century health care in america. commodities crushed today. oil breaking key support levels hitting five-month lows. gold six-week lows. we will go inside that slide.
itunes, icloud, ieverything, music, tv, apple services business, it is on fire. ceo tim cook tells our jim cramer where he sees growth in the next three years. it's staggering. "power lunch," i'm going to stagger back to the lunch. it starts right now. welcome to "power lunch." volatile session today, major averages are lower but the dow just bouncing back within triple digit losses. it could be oil's plunge that really helped to send the markets lower. take a look at the picture in crude oil down by 4.3%. tyler mentioned five month lows. the sector following suit. fitbit soaring about 13% after posting a smaller than expected loss. anheuser-busch up 5% and beezer homes up more than 10% on its strong earnings report. bob is on the floor of the new york stock exchange with more. hey, bob. >> hello, melissa. this is largely a commodity
story. a lot to like about stocks right now, but we talked this morning about the fact that there's a couple flies in the ointments that can make things messier. that is playing out today. china has been talk of slowing spending patterns in china, tighter monetary conditions as well, maybe more regulatory scrutiny. that's playing out a little bit. secondly, oil dropping. you saw the numbers that tyler showed you. this is largely commodities. steel and iron/ore stocks. allegheny technologies, all notably weaker. copper stocks like free port, southern copper also on the weak side. vedanta as well. there's the clear indication global weakness on the china story. on the oil story, chesapeake, southwest energy, whiting, marathon oil. the entire group is down, 3, 4, 5%. of course energy stocks now are now starting to show up on new low lists believe it or not.
apache, murphy, range resources all 52-week lows. the oil patch has to start cutting production. q2 production would be lower than expected, that stock is moving down. guys, i think you'll see that a lot more often. we're only eight points from a new high on the s&p 500. back to you. >> from wall street now to d.c., president trump facing a major task as they are debating the health care bill. the expectation is that it will pass, but it could face major hurdles in the senate. still a win today would be a major milestone for the president. we have all the angles covered for you. we have live on capitol hill and at the white house. what's the latest? >> reporter: melissa, the house is currently debating the health care bill on the floor that's expected to wrap within the next 10 to 15 minutes or so and open it up to votes. latest count from nbc news is that there are only 17 republican lawmakers who remain opposed to the bill. that would give leadership
enough support to push this through. remember, they can only lose 21 votes if democrats remain united in their opposition. earlier today, minority leader nancy pelosi slammed this bill in a press conference with reporters. >> republicans are maliciously again attempting to destroy health care and coverage for the american people. this is really almost i would say a welcomed debate. i would hope that they realize that this is really bad for the country, but i do say that it is good in one respect. it's going to provide a great civics lesson for america. >> reporter: but even in a best-case scenario for republicans this afternoon, this bill still faces big questions in the senate. mitch mcconnell warning reporters that this legislation will see major changes once it gets to the upper chambers. guys, this fight is far from over. >> ylon, thank you on capitol hill.
now to the white house. >> reporter: hi, melissa. they know exactly what ylon was saying they have a big uphill fight in the united states senate. here at the white house, they say they're feeling good about today's vote. they're confident they're going to win. the president talked about it in the rose garden earlier today. he was at an unrelated event on a religious freedom executive order, but he talked about his confidence that this would be a good day for the white house today. here is what he said. >> today is a very big day. we have a big vote coming up in a little while and hopefully we'll have a wonderful day and wonderful vote and take care of a lot of people, great, great people from this country with their health care, their health care needs and we hope to be able to do that. we have all fought very hard to be able to do that. >> now take a look at a live look-in at the house of representatives up where ylon is standing. they are getting ready to conduct this vote later on this afternoon. we're told within about an hour's time we'll see the vote. in terms of the united states
senate, at the white house, a big vote in the house could go a long way in the senate. a lot of the senators vote in lock step. they're looking for those linkages between particular house members and senators. they think they can get this done in the senate but that is a big open question right now. it's the political question of the day. >> thank you. let's get back to the capitol hill right now and talk to a member of the gop whip team, representative mark wane mullens serves oklahoma second congressional district and is a key player in garnering votes. welcome to "power lunch." good to have you. >> thank you for having me on again. >> we know it's a very fluid situation right now as the house prepares for a vote, but according to nbc news right now 17 gop members of the house plan to vote against it. does that member match? we're watching that 21 number very carefully. >> well, we have the votes to make it across the floor. obviously it's pretty thin margins, but we're there. i don't have the exact number.
some of the members aren't here. they had a couple actually had emergencies back in their district and so we get that. we also lost a yes, too, because of it. but we're there. we're excited about this day and we're looking forward to the vote coming up here in the next 30 minutes or so. >> you know, one of the most contentious parts of the bill has been its treatment of people with pre-existing conditions. can you assure those who have coverage now and have pre-existing conditions that they will be able to be covered at an affordable price under this new legislation? >> absolutely. pre-existing conditions have never been on the table. there's been a lot of confusion about it. but the truth is right now what we're allowing people to do is people with pre-existing conditions have access to health care. we have five states currently that have nobody in the exchange. which means people with pre-existing conditions can't go anywhere. oklahoma, which is the state that i have the privilege of representing is on the verge of
losing those. we also seen virginia and i believe it was iowa that recently came out where they're going to lose their coverage, too. so what we're doing is we're actually protecting people with pre-existing conditions at the same time giving them the ability actually shop health care that works for them. they're losing their health care that's not affordable the way that it is, so we're bringing it to the patient and allowing them to build to have a market that they can actually go shop at. >> one of the criticisms of what is known as obamacare is that so many insurers have pulled out of those local or state markets. >> that's right. >> aetna announcing it would pull out of virginia yesterday. i believe that's what you're probably referring to. >> yes, absolutely. >> by what mechanism does this new legislation ensure that more commercial insurers will choose to do business in all 50 states? in other words, in some states there may be one or none. under this new legislation, do
you expect there to be dozens of providers who will choose to do business in states or what? >> well what we're doing is opening the market up and allowing people to go compete. what this does is take the layers and layers of bureaucracy and regulations that's piled up on the insurance carriers the way they are right now which is causing our premiums to skyrocket, our deductibles to skyrocket and peeling back those layers at the same time protectionings pre-existing conditions and allowing the states to carry themselves to allow the insurers to fill in, if they need to, and allows them to come back into the market and compete for our business. >> what would cause them to want to come back in? >> for one, we changed the ratio which is a 3. 1 ratio or 5-1 or which ever way the states want to ratio it. >> older patients can pay -- will have to pay five times? i'm sorry. >> no. what we do the 3-1-5-1 ratio what that means is the programs
or the insurer's packages that they bring to us, we say that instead of through obamacare they have a 3-1 ratio, they have to have one person with high risk means age or pre-existing condition per three healthier actually, two healthy individuals. what we do, we allow the insurance carriers to spread that out. they can offer a package now that's a 5-1 or at the state chooses to go above that we give them the flexibility to do that, which allows the risker to be able to be shared throughout everybody rather than having to confine it to a short number of people. so, we allow them to spread the cost out. that's okay. that's what all insurer's do. at the same time, we close the loophole that allows people that have insurance to be able to claim a hardship and go back 90 days backwards because of whatever unvariable hardship and go 90 days forward. someone can have a full year of coverage and only pay two months of premiums for the whole year. well, what happens is the
insurance carriers have to pass that on to us. what we're saying is, look, if you want insurance, we have to create the market for you to go out and afford it, shop it and buy it. at the same time, some of the most expensive requirements which is regulations on the insurance, the insurers are saying kills us. doesn't allow us to the stay in the market. we closed some of the loopholes that they have to pass on to the consumer which is us. >> you did a wonderful job explaining a complicated thing. i'm not sure i understand it any better, representative mullen, but you tried your darnest to do it. >> you're saying it will be more economical for the insurers to entry the market and that's what will bring them back. >> absolutely. the patient will be allowed to hunt or shop actually in a market where people are competing if our business again. it is complicated. there's no question it's complicated. look, the obamacare or aca was 2,700 pages when it passed. it's swollen to over 8,000 pages
now. we're taking it and we're dropping it down to under 300 pages now. and allowing the patient to have control of their health care again, but it is extremely complicated. that's why it's taken so long to get this thing across the finish line. >> we know you have a lot of work to do in the next half hour or so. >> i do. >> just do clarify, it's 216 that's the magic number we need to watch for in terms of passage of this? >> it's 215 or 216. that number is changing because like i said there's been a couple people that's had to leave because of emergencies that's in their district. >> it's still in flux. >> yes. we have one member in a very unfortunate circumstance right now with his wife. so we lost some people aren't here. the magic number could be 215, 216. >> got it. thank you so much for your time. appreciate it. congressman markwayne mullen. >> our next guest says our current health care system is broken, so what needs to be done to fix it. bring in executive director and ceo of the permanente group.
you have a new book call "mistreated." there it is. put it up there. why we think we're getting good health care and why we are usually wrong. i'm completely confused. i don't understand it. i can't help but feel that it would be simpler -- i'm not saying i favor it or whatever, that the world would be simpler if there was a single payer in this country. am i wrong about that? >> you're not wrong in the sense that -- >> could be. might not be better. >> it could be simpler. it might not be simpler, but the theme of the book "mistreated" is it's less about who pays and the coverage and how care is delivered. right now the cost of care is rising more rapidly than individuals, businesses or the government can spend. half a million people die every year from preventable disease, from medical error, including my father, which the book opens
with, and that is why it is mistreated. the system is broken. it's a 19th century cottage industry. >> is this legislation that the gop and the president are pushing going to make for a better health care payment system and a better health care delivery system? it's going to help more people? >> so at this point there's so much uncertainty. still talk about state waivers. it's not clear what the states are going to do as a consequence of that. we still haven't figured out if the so-called cost reduction subsidies are going to be maintained. and of course you heard earlier, melissa talked about the fact that it has to go through the senate and of course the bipartisan committee. so there's more unknowns that are there, but the real issue the delivery system and neither the aca or acha does very much to change that delivery system. and my book and my focus as a physician is that we've got to get to the delivery system better so patients avoid disease, so patients avoid medical error, so care becomes
more affordable, integration, collaboration, technology. these are the underlying pieces. >> doesn't a delivery system sort of grow up and fill in -- i'm thinking of a mold and the mold is the system in how things are paid for and how people are insure and the system sort of adapts and both sort of adapt together, so therefore part of the system is designed because of the way insurance is set up in this country, no? i mean, when you're talking about rising costs, is part of that the lack of transparency we have. there's the inability -- you mentioned this several times -- there's a complete inability of consumer with health care to go and see what something costs. anybody can change charge for anything because i don't know what it costs and the insurers pay for it any way so i don't care what it is. >> you're right. it's completely nontransparent to the patient. the issue and the delivery system is different. doctors are scattered across the community. hospitals in every little town.
the technology is old technology that exists right now. you can't have a video visit with your doctor. you can't send a secure message. you can't book your own appointment. think about this in banking, retail, finance, you would never tolerate what you tolerate in your health care everyday. that's why i believe we're mistreated. >> i'm a big admirer of kaiser permanente. it is a nonprofit or not for profit organization. >> yes. >> i worry that when you bring in a validly profit seeking enterprises like insurance companies, like pharmacy benefit manager companies that the profit motive drives increased costs in many ways. that's just my little editorialization. but my thinking is that ultimately we're going to -- that health care delivery and insurance is going to be done the way kaiser does it. i get my insurance from the same company that provides my medical
group that does my diagnostic testing that puts me in the hospital. and it's going to be kaiser or it's going to be mass general or it's going to be mayor or it's going to be inova or somebody like that. am i far off about that? >> no, you're exactly right. that's what mistreated is all about. those four pillars of how you put it together, integrating horizontally and vertically between the insurance and delivery system, within a specialty, how doctors work together to provide that care to you. i'm the chairman of what's called cap, the council accountability for physicians. the groups you talked about and all of these groups have come together exactly the way you're describing. the question s what's going to take for all of america, every place in the united states -- >> upmc -- >> to get there. >> good luck with the book, dr. pearl. >> thank you. >> big day for president trump as house republicans get ready to vote on health care. will it pass this time? the markets may move if it does not.
so we'll head back to capitol hill for a check. but first, oil and gold getting clobbered today. hitting levels we haven't seen in five month. 47 was that support, 45 to 47 is new range of support. are we headed even lower? the levels you need to watch. big interview with the ceo of vanguard. "power lunch" is back in two. we, the entertainment-loving people, want all our rooms to be tv rooms. because those are the best rooms. because they have tvs in them. and, when we're not in those rooms, we want our shows to go with us. anywhere? you got that right, kid show thing. get a directv all-included package for 4 rooms. only $25 a month, price guaranteed for 2 years. available for at&t unlimited plus customers.
crude hitting five month lows breaking below 46 bucks a barrel. let's dig in deeper on these declines. dennis, always good to speak with you. you know, sometimes we look at oil and we look at the decline in oil and say it's supply and demand. but here we are in a situation where it's not just oil, it's the industrial metals, it's gold and everything sitting basically five-month lows. what does this tell you? >> well, i guess it's speaking to the fact that the world is concerned that global economic activity may, in fact, be slowing down. we worry all the time whether china will continue to be as aggressively globally strong as it has been over the course of the past several years, but the data coming out of china recently has been a little less than exuberant and has been detrimental. it's not just that crude oil is weak or copper is weak, it's that the other industrial metals are all weak and also we see the grains with fundamentals being rathser strong for the grain markets even the grains today are weak.
this has grown into becoming a margin clerk type liquidation phase. i think there's a bit of panic in the air. when you take crude oil down 4% in one day, take gold down 1% in one day, that's probably beyond rationality and probably margin liquidation than anything. >> people are getting taps on their shoulders with these declines. >> they're getting taps on their shoulders absolutely saying you have to get out whether you like it or not, if you don't, we'll get you out. >> how about the trade and the hope for infrastructure? i know, dennis, you have been a fan of infrastructure trades, but all of these commodities have basically erased everything that they've gained since trump was elected. so at this point, what's your outlook? do the metals and the commodity action tell dwlu perhaps a trade is long in the tooth given what's going on with the legislative agenda? >> there's no question that the trade is long in the tooth. when u.s. steel last week broke 25% in one day because of bad earnings, you could tell that the game was beginning to change. some of the other infrastructure
trades are still holding on. cement still seems to be holding on. aluminum seems to be holding on. one of my favorites is ball bearings but what's more incumbent in economic growth is ball bearings than every motor in the world. it seems to be holding out. copper and steel are clearly showing signs of disdain and dismay. >> you agree with those declines but when it comes to like a timkin or another ball baring producer forgive me i don't know too many of them -- >> that's it. >> you're on board with that? >> you are you and i am me. i did not know you could trade ball bearings as a commodity. >> there are a couple in the united states. >> we need -- >> if you did it would only have two members in it and it would be probably ill advised. so, the only way to do it is to buy one or two of the ball baring manufacturers. >> do you think opec reups that
six-month production cut deal at the may 25th meeting? >> no question. they have no choice but it won't matter if they do or not. we have become the marge kal producer at the margin. and the fact of the matter is we continue to produce crude oil t attiat progressively lower prices. two things are happening, not only are we producing more crude oil, something that nobody paid attention to last week, the first fracked well was fracked in the arctic in russia. if that's the first, there will be hundreds more. and you have to believe that there's plenty of frackable land. there's plenty of supply. at the same time, demand seems to be weakening. your automobile you drive now days is so much more efficient than the ones that were in production a mere five days. you have problems. >> last quick question, dennis. do we believe that equities follow commodities? >> that's a real good question. the trend is still up in the equities market. still moving from the lower left to the upper right. you have no choice.
one doesn't have to be aggressively bullish, but one still has to be bullish of equis the whether you like it or not. commodity prices on balance if they decline, all things being otherwise equal should be suppo supportive. >> dennis, good to see you. the house is set to vote on health care any minute now. a win today would be a major milestone for the president. will he get the win? seems like it's stacking up that way. that's i believe florida representative kerks iativ iati in the well of the house. speak eer ryan will speak in a w minutes. that's what speakers do, speak. t medicare doesn't pay all my medical expenses, i looked at my options. then i got a medicare supplement insurance plan. [ male announcer ] if you're eligible for medicare, you may know it only covers about 80% of your part b medical expenses.
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welcome back to "power lunch." live on the floor of the cme. rates have moved up. really since 8:30s release. the data points maybe post-fed yesterday. one-week chart, we cleared the zone. open the chart up to november, we're right back into that kind of 230 range define the bottom. but the real story is, look at commodities then look at the dollar index. look at this november 1st chart of the dollar index because we are about less than a 12th of a cent away from testing that low you see. the last low at the end of april
98/78. the dollar index would be at the lowest level since november. a lot of counterintuitive things going on in commodities with respect to the dollar. it will be exciting to watch the follow through. >> thank you. oil one of your top market stories right now. oil plunging this hour, falling below key support levels, gold sliding, too. >> good afternoon, brian. that's right. the drop we're seeing in crude oil today and commodities across the board is coming from fears traders tell me about the weak data coming out of china all week. after the numbers were off yesterday, there could be a serious issue with demand here. that seasonal boost in demand is the only reason that crude prices would rally at this time of year aside from some major opec action in a couple weeks from now. you can see the moves in oil reflected in the metals, too, specially in copper and gold taking a big hit as well. look at the charts. crude down more than 6%. copper more than 3%, too. it was when crude broke 46 today
key technical level of support there that equities started to turn and the markets started to stake a cue from commodities that maybe there's some risk not priced in here. back to you. >> a quick market flash. >> let's dove tail off of what jackie was talking about gold. the gold miners etf the gdx down 2.5% so far. take a look at shares, all lower today. that's what's dragging that etf down, but not everything tied to gold is getting hit today. check out of shares of rangold resources positive. back over to you. >> thank you. let's go down to d.c. nancy pelosi is speaking on the house floor. >> i think those words bare repeating. over 50 years ago, dr. king said of all of the forms of inequality and jinjustice in health care is the most shocking
and inhumane because it most often results in physical death. we come to the floor with the moral force of the dr. martin luther's words in our hearts. it's a civil right, a fundamental right for every person in our country, not just the privileged few. and so in the spirit, let us be prayerful about how we go forward on this very personal issue about the well being of every person in our country. speaker ryan once called this bill an act of mercy. an act of mercy. there is no mercy here. indeed, inequality and inhumanity is exactly -- that is exactly what trumpcare has in store for the american people, but when he said it's an act of mercy here is what others said. from the beginning trumpcare was a moral monstrosity that will devastate seniors, children and hard working americans. that was from me. but don't take it from me, sister simone camp bell said
this is not the faithful way forward and must be rejected. the catholic health association wrote -- we strongly encourage the full house to reject this replacement bill. and the united methodist church said opposing trumpcare. this is what they said -- people will die because of efforts like this to roll back healthcare. lutheran services in america said trumpcare will jeopardize the health care and long-term services and support of millions of americans. the episcopal church said trumpcare falls woefully short of our spiritual calling to care for the least of these as well as the noble values upon which our great nation was founded. end of quote. and in all that was said before the republicans decided to destroy the protections of americans with pre-existing conditions. i grant our republican friends their position. i respect them and their
constituents who sent them here, but i reject the wrong priorities in trumpcare. tax cuts for the rich at the expense of health insurance for tens of millions of working class americans. trumpcare spotlights the differences in priorities between democrats and republicans in congress. it is step forward in the long standing republican belief that medicare should wither on the vine, that medicaid should be shrunken and that social security should be privatized. if you believe in the health and well being of the american people, you must reject this bill before us now. it is what trumpcare -- here is what it means to the american people. you know, much has been said about policy here today and over time, much has been said about politics. what the politics of this. but what's really important is what this means to the american people. and they know, they are
listening, they know what it means to them. and it means trumpcare does, it forces families to pay higher premiums in deductibles increasing out of pocket costs. higher cost. less coverage. trumpcare will take away health care from more than 24 million hard working americans. a crushing age tax. trump care forces americans age 50 to 64 to pay premiums five times higher than what others pay for health coverage, no matter how healthy they are. steals from medicare, steals from medicare. trumpcare shortens the life of medicare trust funds and ransacks funds that seniors depend on to get lrong-term car they need. that's why it's consistent with their wither on the vine for medicare philosophy. and then, if that were not bad enough, and they couldn't pass their bill because it was that bad, they moved further away
from the american people by gutting key protections. trump care eviscerates essential health benefits such as maternity care, prescription drugs, emergency coverage, prenatal care and guts protections for americans with pre-existing medical conditions. as bad as trump care was the first time around, you know, it was dead. it died. it died right here on the floor. now it's come back to life like a zombie, even more scary than before. and it is even worse. if republicans have their way, americans with pre-existing conditions will be pushed off their insurance and segregated into high risk pools where they will face soaring costs, worse coverage and restricted care. trumpcare means huge, huge premium increases. it's frightening future for families who need affordable,
dependable care the most. now on the floor, the republicans have recklessly and some would say fraudulently claimed that trumpcare covers americans with pre-existing conditions. it does not. it does not. as robert at the conservative center said about the upton amendment, the $8 billion amount is a pit ens spread over five years it's a fifth of a pittance. >> we're going to step away. house minority leader nancy pelosi making the case for not repealing obamacare. we are expecting house majority leader, house speaker paul ryan to come out in support of the ahca, his plan call it trumpcare, whatever you want to call it, that vote set to take place. we're going to take a short break and come back with more on this and your markets and your money. stick around. pass please. i'm here to fix the elevator. nothing's wrong with the elevator. right. but you want to fix it. right.
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hill with the latest. ylon, when obamacare was passed, it was passed with the thinnest of margins. all democrats, no republicans. that's what's going to happen here, right? >> reporter: that's what we expect to happen, certainly. and what democrats are trying to do right now is to delay the health care vote by continuing to debate using parliamentary procedures to push back the health care vote that is so critical for republicans. now, meanwhile house speaker paul ryan did tweet even as his colleagues were on the floor debating this, he put out this statement, obamacare has failed less choice and higher presume yums, return to patient centered health care is long overdue. now the first time that this bill was scheduled to come up for a vote and that paul ryan had to pull it, he said the party was under going some growing pains. this would be an opportunity for paul ryan to show that his party can be the adults in the room, conservatives and moderates can come together and actually
govern and get some legislation passed. but remember, even under a best-case scenario for republicans this afternoon, if this passes, this is still going to face a big challenge in the senate. >> all right, ylon, thank you very much. you're following it for us there from washington. we'll be back with you when the vote starts or if not sooner. larry, what do you make of all this? >> what i know of the house bill, the new house bill the revised bill, i'm fine with it. the good should never be the enemy, the perfect. i think they've dealt with the critical issues. you know, one thing republicans have to deal with here, there are uninsured people and you can't let the issue of preconditions, people who are sick, get in the way of that. and the other part is tax credits have to be distributed to the working poor. now to the point of this bill, fredty upton put in $8 billion more so that goes into the
community ratings, the risk pool. i think that works. there's only a couple thousands people here, really. it's $140 billion more more or less. that's going to cover them. they should have gone there in the first place. the gop should have said in the very beginning we are a generous country. we must protect these people, pure and simple. >> i didn't know anything about pre-existing conditions. we hear it and i did not -- according to kaiser family foundation, nonprofit, nonpartisan group i just put this on my facebook page, 52 million americans now have what would be considered -- most of them, one in three in every state in the south. so we have got a -- it is a most are covered by private insurance. >> only couple hundred thousands are -- that's a bad number. that's a misleading number. >> the point that larry is making is that some people have conditions that are already insured. >> that's what i said and that's what they said. >> this whole mish mosh -- >> we have to depoliticize it.
this is all theater. >> of trillions of dollars of taxing spending and regulating. okay? a government-run health care system was about a couple hundred thousands people. i say, okay, we're a generous nation. cover them. just cover them. i think they should do that. i don't know why the gop doesn't come out and just say that. the other part is very important and i don't know the details here. the essential benefits mandate drives up -- >> the ten things that were called for. >> ten things. mental health, maternity leaf, things like that. >> not everybody needs all of them. we should pick and choose. that's what ryan was trying to say. if you can separate out the ill people from the healthy and then allow the healthy people to choose what they need, you will see crashing premiums. and you will see skyrocketing demand. >> i'm going to jump in here. president just tweeting out -- the president tweeting out -- it's the trump tweet just crossed. i'm watching the democrats trying to defend the, quote,
keep your doctor. you can keep your plan and premiums will go down, end quote, obamacare lie. so, the president deeply involved in this and obviously watching the vote. >> do you know -- yes -- >> this seems like he's responding to nancy pelosi who he just heard, that's what i'm guessing. >> obamacare is very deeply unpopular from day one. the gop has not gotten the job done of getting a good plan and marketing the plan. okay? so i get that. i just want to say, though, if you went back to like, i don't know, 2005, 2006 before we had obamacare, 80% some odd of americans were happy with their health care insurance. i just want to make that point. >> i'm going to interrupt you, larry. we're going to listen to speaker ryan who will rebut presumably nancy pelosi. >> chairman brad di, chairman black, sessionings. i want to thank the members of those committees and ways and means, budget and rules. i want to thank all the members
who make constructive contributions throughout this entire, dlibtive bottom up organic process. i want to thank the president of the united states for his steadfast leadership. [ applause ]. in his address -- mr. speaker -- >> house will be in order. >> it is addressed in this chamber he called on congress to act. and today we take the next step to repeal and replace obamacare. [ applause ]. i want to thank vice president pence, secretary price, director mull vany and all of their te teams, my colleagues there's a fundamental and urgent choice at the heart of this debate.
we can continue with the status quo under obamacare, and we know what that looks like. it means even higher premiums, even fewer choices, even more insurance companies pulling out, even more uncertainty and even more chaos. look at what has happened in iowa this week. as is the case in so many areas in this country, iowa is down to one insurer. that, of course, is not a choice, but now that one insurer is saying that it will have to pull out of 94 of 99 counties in iowa. this is happening right now. so tens of thousands of iowans will go from having one option to no options. that is not a choice.
this is a crisis. and it is happening right now. what protection is obamacare if there is no health care plan to purchase in your state? this is the direction obamacare is rapidly heading. so we can continue with this status quo or we can put this collapsing law behind us, end this failed experiment. let's make it easier for people to afford their health insurance. let's give people more choices and more control over their care. let's make insurance companies come in and compete for your business. let's return power from washington to the states. let's help get people peace of mind. let's put the patient, not the bureaucrats, at the center of
the system. this bill does all of those things. this bill delivers on the promises that we have made to the american people. you know, a lot of us have been waiting seven years to cast this vote. many of us are here because we pledged to cast this very vote, to repeal and replace obamacare, to rescue people from this collapsing law. are we going to meet this test? are we going to be men and women of our word? are we going to keep the promises that we made? or are we going to falter? no. after all of this, after all of this, after seeing what is happening in iowa and around the
country, after seeing this law collapsing while we witness it across the country, knowing all this turmoil that is coming, we will not falter. we will replace. and today is the day that we're going to do this. today this house has the opportunity to do more than just fulfill a promise. we have the opportunity to raise our gaze and set a bold course for our country. we have the opportunity to show that we've got the resolve, to tackle the big challenges in this country before they tackle us. to stop the drift of arrogant, bigoted government policies in our lives and to begin a new era of reform, based on liberty and self determination, giving people choices, letting them control their own destinies. that is the day that is before us right here. so let us pass this bill to take the next step to put obamacare
behind us. let us pass this bill to build a better health care system for american families. let us pass this bill to leave the country better than we found it because that is why we are here. this bill to leave this country better than we found it because that is why we are here. that is what is at stake today. and that is why i am going to be so proud to cast my vote for this legislation and i urge all of my colleagues to do the same. [ applause ] >> and we been looking at house speak r paul ryan make an appeal for the pass savaged of aaca. in the meantime we're going to take a quick break. "power lunch" will be right back.
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for the services. we also say that we're going to double the services business. our objective is to double by 2020. and that projection is a sum of new services and existing services. >> shark take's kevin o'leary picked apple with the number one selection over stock drafts. kevin we're going to get your reaction to thing you heard in jim's interview with tim cook. >> i think this corridor is positivetal in a pig wbig way. for years now the biggest in investors have -- or is it something else. services in the last 24 he or she have gone through 10% of 12. cook told jim he's going to double this to 24, to 25% revenue. that's a completely different model. the service industry has some of
the highest margins in the content world. that's the reason i made this any number one stock pick. i believe cook will go it. that is a huge change in what apple is. it becomes a high-margin players. >> we pointed this out is that apple services business is number two business behind the iphone. it is bigger than facebook's entire business rng does more revenue than all of facebook. >> and yet apple trades at a significant discount in a pe ratio. it is a very conservative number. this stock has been the yin and yang between the consumer electronics and services content for five years and it's in fact more volatile than facebook is and its business keep growing. i think it's going to get in voefrts with the stock buy back and the increase in dividend which you know i love.
and i'm protesting outside with a card on, we should be including dividends. that's mee outside of of -- i want my dividends. >> price appreciation in other words? >> exactly my friends. >> so, why do you think the market has tagged apple with that sort of punitive evaluation? and it's been that way for years and years and years, and what's going to wake investors up? >> one simple reason, the phone business grew so quickly that it became huge, people started thinking about this company even three years ago as simply another cell phone hardware manufacturer. everybody knows where that story in, moe kia, motorola, they all ended up in this smithsonian and destroy old technology. they have continued to build other technologies and make sure the phone is a point by which you enter a consumer's life.
look at how much the memory as grown. the aid is coming, it's going to be a memory pig. you're going to have to pay a fortunate to store your videos, pictures and music on that thing just for the memory and the cloud. i love that business so much it makes me cry. >> well we'll send soclean next kevin. thank you very much. >> thank you. >> by the way, fox draft a week ago and don peeble have a nice lead. the peeb peeb bls choice. the vote on healthcare, rich johnsons hoping for a win they can deliver to their constituents and the president. we will find out ahead, i believe this is a preliminary vote, can somebody advise me on
. welcome back to "power lunch" everybody. moments away from the big vote on the american healthcare act in the house. right now they're voting on a preliminary measure. president trump keeping a close eye on what's happening on the hill. tweeting about it moments ago and pushing back his departure to new york by three hours. let's go to e lon on capitol hill. what are they voting on now and when does this big vote come up? >> tyler, the house is voting on a series of measures this afternoon. the healthcare is the second one that they'll take up. right now they're considering a related provision that would require members of congress to be subject to the american healthcare act and its provisions. that means congress has to abide by whatever they end up passing later on today. that vote will probably happen in about 20 or 25 minutes, that vote on the healthcare bill after they wrap up this first provision. we heard house speaker paul ryan give a speech on the house floor
earlier this afternoon. he was met by thunderous applause and it's important to note his rhetoric in that speech. he used images of hope and optimism and the idea he wants to build a better future from the country, that's different than what we heard previously about obamacare being a disaster. it took the country into a downward spiral. there's a lot of optimism, hope here on the floor on capitol hill as this voting is underway. >> let's bring in healthcare panelist, kevin, john goodman, and on set, larry kudlow. i want to show and explain to people that's not the vote for obamacare, it is a double negative. it's a vote that exclude the provision to exclude commerce from having to use all of the provisions of the new healthcare law. in other words it gives congress the ability to pick and chose
for him or herself which provisions of the healthcare that they would like to have. because obamacare forced them to buy on the individual marketplaces. a self-serving vote by congress right now, that's that, the healthcare vote will be after this. >> allow them to vote on a new bill. >> does that make sense, bottom line kevin does this pass healthcare repeal? >> well you know, i think there are three key challenges to this legislation. number one is that it has been scored by the co oh, so we doesn't know how much it's going to cost on what the impact of the uninsured is going to be yet. it'll probably have an effect on the uninsured. the second is that we really don't think anybody can say what the impact on preexisting conditions folks are going to have, because while there's a fixed amount of money that's gone to be dedicated to covering
people of preexisting conditions through the high risk pool, we don't know how many states may will b applying for waivers. if two states may be applying for waivers there's probably more than enough money. if 19 apply and are approved there's probably not enough money. and on insurance cost and premiums it's a cost we have in our country, the real problem we have is healthcare cost. >> john goodman why are we talking about that? i tweeted out today here's with the gop says we're doomed if we don't repeal obamacare and we're doomed if we repooel it. are they both right? >> here's one thing the democrats got right, the republicans are taking $1 trillion for the next two years out of healthcare and they really are cutting tax for the rich and special interests, and
most of those special interests weren't asking for a tax cut. here's something neither party pointed out, when this is all said and done if this becomes law hardly anything will be the infrastructure will be changed by obamacare. people will be able to move back and forth, premiums have nothing to do with their healthcare cost that's why we have the race to the bottom right now in exchanges. a worst of all the group market will continue to dump high-cost elderly patients on the individual market and that's why we have a death spiral. >> all right you first remarked, are you referring to the means testing or lack of means tests for the tax credits, not enough subsidies are being pushed to the poor at the end? >> the democrats put $2 trillion on the table for health reform and i've always believed we
should have used that money to reform the healthcare system. paul ryan is into tax cuts so he give the money back to the special interest who helped give us obamacare, that's the insurance company, the pharmaceutical companies all those folks get a tax cut so it takes money out of the system. so the cdl is predicted by next year's election we'll have 40 million uninsured and years out we'll have 20 million uninsured. that's because they're taking money out of medicaid. >> i'm not sure i agree with that logic. i think one of the big issues here is the essential benefits mandate which i understands, and lord knows will now be handed over to the states to make share own decision. if you remove that, that opens the door for a massive reduction in premiums. >> let me bake make a prediction to you.
hardly any states are going to ask for waiver and even if they do, no state is going to take away the couldn't for mental health and drug abuse. no state is going to take away a maternity coverage mandate and no state is going to take away the mandate for contra acceptive. it's hard to repeal a mandate. >> i know but this at least opens a door, it gives choice. ryan's a guy who believes in choice. i have to believe gentlemen, i just have to believe, this takes a major step towards dealing with the -- you know people who are ill. you cannot charge healthy people the same as you're charging those with who are ill -- >> as i understand it larry if you are covered by an employer health plan which we all are uskt be effected by this because the employers' insurance company
can chose which state -- and then i will be forced even if i live in a tat does that's does not opt out -- >> you're insured. >> exactly. >> can i respond? >> john good day man there's a reason for that right. according to the foundation some states in the south. 33% of alabama, mississippi and kentucky have some falling under preexisting conditions while colorado has just 22% so -- >> those are nonsense numbers. >> your foundation is nonsense. >> that vote is nonsense. now before there was obamacare in the individual market, insurers could refuse to cover people who were uninsurable. less than 1% of the united states is estimated to be ununusual bl.
the kizer number is wrong. what's the right way to handle this, create a market for sick people. we should have cancer treatment of america, md anderson, advertise to say if you have cancer we want you. the diabetes center should try to track diabetes patient. >> right now if they all run -- >> uninsured people with copy existing conditions are unacceptable to me. >> kevin let me ask you, do you believe that vast numbers of individuals who have preexisting conditions, not who is uninsurable, will they be better off, will they be able to get affordable coverage under this new law at the same rate that they did under the aca? >> i believe that we -- we don't know that number one, because we don't know how many states are going to be applying for waivers. i don't share jonathan's view, that know state's going to be
applying for that. i think the fact there's a risk there could be a race to the bottom and that's something that's concerning. i think it's an unknown question but real risk. the second, i also question john's numbers. that seems to be an kproird narl optimistic view of the number of uninsurable in the country. >> who's just -- i just want to know this john goodman. when you create a mark for people with preexcessing conditions. doesn't the federal government have an objects to subsidize those folks? they're at the low end john? >> i don't have a problem with the subsidy, the problem is every health plan has a decision to track the health and avoid the sick. we have a real race to the bottom that's going to continue with the republican bill. the city where i live, dallas, texas, ut southwest is not under any exchange plan.
children's hospital next door not any exchange plans. they're leaving out the best doctors and facility because they don't want sick people. what i'm saying larry, if you had the right premium attached to the right patient there will be a real market to solve these problems. people will try to aattract people will problems instead of running away from them. >> you're saying this doesn't do that? >> notice at all. this continues all the centers already in obamacare. >> we got to leave it there guys. thank you so much. john go johnman, goodman. larry. i hope your skticking around. this tweet reads, republicans will be having a press conference at the beautiful rose garden of the white house after vote. that's the treat right there. and that's one of the latest departure to new york. >> he's watching it. >> he's watching the vote that's
for sure. it means a lot for his administration right, points on the board. >> stakes are very high. >> i know we're times but we're all ad libbing here equally. i'm going to state the fact that john goodman discounted the family members is unbelievable to me. >> john's a good guy. >> i know i didn't get the response. >> all right apple making a major announcement with jim cramer. >> we're creating an advance manufacturing fund where initially putting $1 billion in the fund. >> you said you didn't know that. >> we're announcing it today. you're the first person i'm telling -- well not the first person because we talked to a company they're willing to invest in already -- >> but $1 billion to apple -- >> brlillion dollars of our u.s money we have to borrow to get,
we're proud to do it. by doing that we can be the ripple in the pond because if we can create many many manufacturing jobs around -- there's manufacturing jobs, create more jobs around them because you have a service industry that builds up around them. first investment from this fund later in the month of may. >> we want to let you know the house has begun voting on the ahca. so this is the vote that we have been waiting for all afternoon. certainly this is one that is being closely closely watched by the trump administration, president trump himself. the move to appeal obamacare -- >> what's the number the republicans can lose it's 21. >> 21. >> do you know how fabulous that is? >> a billion dollars -- >> it's a big chunk of change. chinese worried that u.s. tax
cuts will compete for investments. >> yes. yes. >> of course. if you get a tax cut bill including the repatriation, these company wills take the cash pregnant it home and invest it one way or another. that's exactly right. hats off to them. the actual number is important because we haven't had any business investments in years. >> how important is this for paul ryan politically? >> the healthcare vote. that'll be a career-saving vote the speech he just gave. >> that's a very important question. and it's important to the gop to show we're running a government and center right promarket reforms can be implemented and worked. the law line for ryan and trump. more for ryan good point you're
making. cthere's also an article saying reince priebus was calling around real hard for the passage of age. do you see that? do you think that's the case. >> i don't know if ryan's job is on the line, i worked for baker years ago. and ryan says -- it's particular connections on the hill. what you're saying is the trump white house is pushing hard to get this done. come back to your redemption point earlier, the great big bung let four weeks ago that got a second chance in life, get it done. >> could this pave the way for tax reform in your view? >> yes. very important. nothing else the legislative balance here is sucking all the oxygen out of the air okay. yo i don't care about the numbers so much, growth is the most
important thing. yes, this will go the senate, i'm going to make a pet here i don't know, i think the senate will come back with something that is doable and i think it is something that will get done. >> it'll be tight, there's an hour left in voting. 208 votes for yes. two democrats by the way. 18 votes for no. 187 democrats voting no. so it's 210 -- 211 now to 205. you said you need maybe 16 if one of the republicans didn't show up due to family emergency. >> i know your a bit cynical in american policies, sometimes in these bills, judgeship, bridges to nowhere, politics, you got to do what you got to do. >> i copy and pasted hr 28-26.
literally. 19,266 words in this bill. so there's a lot of fine print, larry in this. i guarantee all 19,000 which i've not read are all related to healthcare. >> all i say get this gun -- i believe it's good policy, it's going in the right direction. but mostly i want to get to pro growth tax reform. >> 216 yay, 216 that gets it over the top i believe. i believe -- and those two democrats who were for have switched they're vote now to nay. it looks like hr-28 it's not the policy, the election could call it. but for those numbers unless something were to switch it looks good for gop. >> they got the vote. >> and the time remaining at
zero i believe that has reflected pass. >> looking behind all this political drama and healthcare is the pro growth texas cut, the business tax cut. that's the tim story about another billion dollars in private investment, that's the tax cut. this thing is taking the oxygen out of the air. get this done, i think this is decent policy but the tax cut is behind it. >> we reached a positive on the s&p and nasdaq moments before the house reached the number of votes and we've gone back into the red. but markets are holding in. >> so that is a pass correct? >> this one passes is other one passes. >> the actual bill will pass, goes to the senate, i think the senate will turn it back, you know pretty much similarly. they're working together right, many get your confidence, many get your vote. it's going to take a while, a
couple months but it won't take forever. and get this tax reform more speedily done. votes for stocks, votes for bill -- >> the chat. >> later upon the table. in this business is the vote on the motion the gentleman from california suspended in pass hr, 1644 as amended. >> 181644, sanctions to republican the trans action ls relating to north korea and across the country. >> republican healthcare pass for this bill. >> a major surge on what is going to happen with this, what
does go to the senate already start to see some of the action pouring in from the mental health association of america was deeply disappointed in the result of the vote. it promise ls better healthcare to lower cost political campaign gave way to cold dark rlts according the mha. the real reason is this stems by allowing the state to opt out of certain provisions, each state to decide as to a lot of complexity. you don't know what states are going to opt out or in. what states might take advantage of the provision to be able to set up high-risk pools to move the people who are high cost, put them in a separate pool. the spending for those high-risk pools, a number of academics have said is not nearly enough if you're going to take out owl of the high-cost patients and put them into special high-risk pools.
a number of folks have been concern about the ability in the bill for insurers to charge those who have higher cost, preexisting conditions, more should their insurance lapse when they come back into the market. in fact, paul mark virtue the ceo of black cost of california el pasoed that provision and said this doesn't happen the problem for people who really need care. insurers overall have been numb, they like some of the flexibility it gives them but they're not sure this is the final version of a bill that is going to help this market. more immediately for the insurers in terms of what is going to happen for 2018 right now as they are trying to push together their weight request for next year. it has to be submitted over the next few weeks. they do not know whether some of the subsidies are beginning to be there. in particular, the subsidies that go to lower income folks in
order to bring down the out-of-pocket cost. there's still some concern here. >> already bertha thank you so much. let's no go-to lieuwy who was following the vote. >> we are watching lawmakers as they leave the house floor and get on to buses that will be headed to the white house where the president has promised a big celebration and press conference in the rose garden now that this important bill for republicans has passed the house and lead the final count with 217 to 213. there are big questions though as it head to the senate, for right now there's a lot of optimism, hope and joy here on capitol hill. back to you. >> all right e lon thank you very much. quick comment larry? >> very rare in american history, very rare to overturn an existing entitlement.
>> let's be clear eamon javers it has not been returned. if you don't know the answer, no worryings, do we have any idea where the senate might receive this, mark it off and vote themselves? >> we don't have any idea when the senate is going to proceed on this. it's not likely the version you just saw on the house floor with pass the house. they'll strip out on provisions and send it back to the congress so each side can work out what the final bill will house on the senate and the floor. nonetheless, this is a big win for the trump white house. they were frustrated to get to a vote on the house floor earlier today. today they got it. democrats on the house floor, if you heard right at the end cheering that that that that north america north america hey
hey hey good-bye to some republicans colleagues. they feel this was an death mark for some modern republicans that are going to tag them with the idea they have removed healthcare with many americans. reminisce santa of the 1993 of the clinton bill which was chanted bye-bye. so those members who you just saw voting in capitol hill, a lot of them know their political careers are on the line with this vote. the winning side on its way over he here to the white house. if you see the president you got to imagine he's in a very good mood. >> i thought i heard them singing that song and i didn't know who it was. >> it appears to be the democrats. >> i thought it was the republicans say good-bye to obamacare. that was my thought.
>> it appears to be democrats singing that to the republicans -- >> it was in 2018 -- >> let's not forget politically, these big nationalalize -- i'm going to call them nationalalize healthcare plans weather it was hilary care in 1993, obamacare in 2010, led to devastating losses for the democrats. remember, the house and senate changed hands and the tax side changed hands again after 2010 -- >> we'll see what happens this time. >> pictures we're showing you of members of the house getting on that bus to the white house to celebrate what this has taken. it's a virkry for now even though the implications down the line are still unknown. >> getting this done, removing this ball towards getting this done is very bullish because we are going to get a business tax
cut that will rejuvenate this economy. >> and we can let the market decide what it thinks the neutral market, cardinal healthcare, hospitals seen benefitting under obamacare is mildly high. so the market may be saying you got to go through the senate, through congress perhaps, you could possibly go through the bird rule which is this thing where you can kill a budget recreation process if it's considered ex strainuous or incidental to the bill. let's bring back in john goodman, kevin and larry kudlow still with us. john you're reaction? >> well i think -- how to reform a healthcare system, create a real market to people can attract people with problems, solve their problems instead of
running away which they are doing now. and they missed the opportunity to protect people from a group market that keep dumping sick people on them. individual markets are only 5% of insurance. the city of detroit says we're bankrupt we're not going to pay for our senior citizens any more. they dump 8,000 retired workers on the system. in texas we have 261,000 retired teachers. the posted time in healthcare is totally unfunded. texas could end that plan, send all those folks to the exchange, that's a number actual to about 1/4th of the enrollment in the plan. if they're allowed to do that exchanged are going to go into death -- >> john goodman, let me pose this question, the final government is going to put
$140 billion into these precondition ill sick risk pools, via the state. why can't this be done through doct without your system which is be proposed. many people can shop around and strength private market exchange. >> it can be. we do that in medicare -- >> why can't we do that here? >> what happens with medicare advantage is no matter how sick you are you're attracted because federal government as to your premium and so you have special needs program, you're given $60,000 a year -- >> that's a win john. that deal with the issue didn't it? >> i push this in the sessions/caddy pill and paul ryan ignored it. i hope this coming back in the senate and resolve real problems. >> gentlemen we're going to leave it there take a quick
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bus to capitol hill. the president tweeted earlier, the president would have a big press conference at the beautiful rose garden immediately after if the vote is virk forruous. let's bring back kevin and john goodman. kevin it to get your response to this vote. >> the prior bill at a 17 approval rating by u.s. citizens, i suspect this bill may beless popular. i think it's going to be a challenge for the parties if they move it to the senate and that probably will not be lost on the senate. there are means within the current legislation that particularly allows insurance company that are attracting sicker people to be kon pen sated for that.
>> with all respect, the risk adjustment, the risk quarters that stuff is bankrupting the bill, bankrupting the budget, there is no end to it. that's part of the death spiral we've all been talking about, you can't do that. the congress cut that off, even obama gave up on that. you have to get more people into the system and the way you do that is by getting rid of the mandates and letting the cost of the premiums fall in a market and gendered approach. that's the way to do that. you -- with all due respect the -- meaning the company with higher risk were paying those are lower risk. way over budget so it was taken up in the last congress. the last congress it was so far over budget. >> may i say something on this? what the insurance -- this was designed by insurance company and what this adjustment mean to
them if it's larry and i are companies and he has losses and i have profits i'm suppose to write him a check at the end of the year, that's private sector socialism. what real adjustment means, market base real adjustment is what we do in medicare advantage. the patient follows the patient regardless of what happens to the profits of the insurance company. >> kevin does anything this n this bill, hr-286 do anything to bring down the cost of healthcare as oppose to figuring out how to pay for healthcare, why isn't anybody talking about how to bring -- why are we so sick? why are medical medical-practice driving doctors out of business? does any of this do anything to address that? >> i think you've underscored an issue i tried to raise earlier, which is this the not just going back to the past, providing any
med-plans again, increasing the people having more bankruptcy, it's really not address i think core issues. some combs in our country is just to high. this is not becoming a issue for individuals, small companies and we can't keep kick g this can down the road. >> i take that you do not see anything in the kreuz market of obamacare which is that. it did nothing, it increased access to insurance but didn't do anything to governor rising healthcare cost? >> what i would suggest to you folks, that's a little bit oversimple fie case of the bill. the creation of acos and other thing and creating more risk barriers, that in fact tried to address that. your point broadly in my view is absolutely correct. we have to address it. >> i just think though that
mandates were the problem. you cannot mandate benefits. people do not want to chose the most expensive plan that doesn't work for them, family budgets matter. so this plan, as i understand it, lord knows, a, takes out the general mandate with justice roberts call the tax and b, open the door on the essential benefits mandate -- >> this is what was driving the insurers out of the state, the idea that more sick people came into the plans than they anticipated and that it was costing them more to provide the coverage. some of which was the mandated coverage but most of the expense -- wait just a moment, most of the expensive coverage goes to 2% of insured people -- >> that is true. >> they do have fatal disease -- >> get healthier people didn't join this batch.
>> so they couldn't make a problem. >> they were the -- years -- >> they wouldn't do it. >> right. >> no amount of government subsidies is going to change that. >> obamacare is designed to overcharge young health people and undercharge sicker people. so of course the sicker people joined and the healthier people didn't. so that's always going to change if you get the prices wrong. >> where's what i don't understand politically, larry maybe you're the best person to ask this, in some ways to vote for profit the exact way it should of, if younger people are going to pay more and older people pay less in obamacare, and older people voted for trump who are going to raise their premiums. we'll take a short break we'll be back after this. with strategies that just track the benchmarks. but investing isn't about achieving average.
interesting climb in growth since obamacare. i'll be first to say the experts that i know are not sure of the connection between obamacare and the decline in the medical services, certainly there was expectation to bring people into the system would raise cost, but at least so far the opposite has appeared. they ought to be sure what that connection is before they go in and repeal it. you could have a deacceleration in medical cost if somebody is doing that. the other issue out there, larry talks about growth, but the idea of fewer people have insurance out there, particularly when it was a key aspect for bankruptcies for many people and also created some ability to move from job to job without concern about snrps for some people struck mess as a negative. >> point ability, point ability is in this reform package. >> but larry --
>> we have -- >> let me just respond because we don't know that. in the prior bill many people lost insurance. >> i understand, this is one of the reforms. will it get through the senate i don't know. first point, there's a fundamental different world view that's all. the argument being made by ryan and company is that fewer mandates and regulations in laws, and greater choice will in fact in sent vise more people to much insurance plans at lower costs, that's what they're saying. they're saying that t removal of the regulatory mandates will make premiums or permit premiums to come down in a market setting, which includes crossing state lines and take away the powers of the big insurance companies. that's the theory. i think it's a very sound
theory. i think we ought to try it for a change instead of having the government run all this stuff. >> if i could respond to that? there's a much more cynical view of this, which is that this is about giving tax breaks to a big bunch of people that didn't need it, for growth and taking insurance away from people. that's the other explanations -- >> difference in tax cut by going away -- >> yeah but larry first of all owe need to defend this notion of how many people are going to lose their insurance because of this bill. we don't know. >> i actually am in agreement with you i think on the point. i feel the first republican plan, i'm just going to call it ryan one, gave far too many tax credits and far too few tax credits to the so-called working poor. and i made that point earlier. >> guys issue -- >> the people in this --
>> sorry. president trm will be holding that conference in the rose garden at 3:30. we also have remarks on the vote at the white house at 3:30. the senate will also consider the healthcare plan after procedural and budgetary scoring reviews, trump senator mcconnell's office. >> the word tack, or tax payer or taxable, that was used 179 times in the bill, i love those word counts, and tax credit deductions for insurance is $143 billion industry in the federal government. it's the single biggest tax deduction that are taken -- >> highly inefficient. but again just --
>> i think we have some common ground here. i have argued for a long time being this process. the original bill did not do enough in the system or tax credits and so forth, i'm going to say the 30 to $60,000 zone. where most of those folks are on employer-based insurance plans. i felt that was one of the fundamental problems. i made the same case with obama who was given tax credits for people $100,000, we don't know that, that's not good. i think we have some common ground on that. >> i agree. >> i'm going to just -- yes, i'm okay with that. >> all these governments -- >> i'm going to say ends of the line, free mark choices, free market capitalism is the best path. we can do this. >> i'd like to debate the mandate with you some other day larry. >> we're going to drop it there. steve i love where you are.
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nasdaq now in the green. let's go to stock in the back of passenger the ach in the house. bertha. >> hey melissa. couple of analyst notes on gupta says this could be positive for the larger cap insurers, united helts of the world,et that and others because it would role roll back the health insurance tax under the aca and if we see tax reform on the back of this they would see a lower tax rate overall. we are seeing some of them today. in the meantime, sheryl oh mek putting out a note about hospitals. the note says hca clears the house. she said this is how healthcare
for the uninsured dies and she said as the house pushes this through congress gets out of the house giving the senators time to come up for an extension. more tough for hospital if morgan stanley will not force clients to liquidate holdings they currently have, but monday, its advisers cannot sell new funds from vanguard. whether that puts a dent into the mutual fund giant is unlikely given the flow of money into the vanguard complex over the years. nearly 900 million and counting. roughly 8.5 times more than others combine and 20 times more than the firm did a decade ago. let's bring in the chairman and ceo to "power lunch," bill, welcome back. good to see you joining us from the ici, the conference in
washington. are you ready, and i know you're a humble guy, are you ready to declare victory, the victory of indexing and low costs over other forms of inveinvesting? >> well, tyler, there's no question that low cost is winning. you know, it's interesting. i sat through a couple sessions here this morning at the general membership meeting that were talking about active management, and the one thing that was constant in the conversation was low cost wins there as well, so i think whether you believe in indexing in the purest form of low cost investing or you're still interested in what active managers can do, the one theme is possibility matters to the end investor. >> you have four points to x-trillion in assets under managements. what percentage of that is in index products or funds, and of the money that's come in to the complex over the past couple years, what percentage goes into index products?
>> today social security a 70/30 split. in terms of flows, it's 75-80% index, and, you know, remainder on the active side, active came in in a couple places, and fixed income world, there's quite a bit of active flow, and in the equities side, it's in a few specialized products. >> why does a company like morgan stanley decide not to sell vanguard funds? simply because they can't make money off them? >> they have a model to be compensated for being on their platform in one form or another, and that's something we won't do. it raises conflict. other advisers do not require it. we've been successful in that channel. you know, it's interesting, i heard from a few individuals at the firm, hoping we'd do more
together rather than less. we'll see how it plays out. >> they want to be paid by you to sell funds, and you find that a conflict of interest. talk about if you see any inherent dangers or troubles with etfs or index products. every dollar coming in pushes -- you got to go out and buy the stocks, and does that in and of itself push the prices of all stocks higher, some of which are getting pushed higher than they ought to be. >> if you look at trading, tyler, index funds represent 5-10% of all trading in equity, both in the u.s. and around the world. to say that index funds push pricing up, the data does not agree with that. you know, from our perspective,
there's still tremendous price discovery going on. you know, there's much more activity from active managers. it's still, by far, the largest portion of management, active versus passage. >> criticisms of etfs, some say being in etfs mutes performances because you have to be invested in a broad bath. that's positive, but it could be a negative side if there's a lot of mediocre stocks in one particular index. cramer came out against ets saying, quote, you want to be in the stock because it's the best name in the sector growing, not a group of mediocre stocks pulling down the high quality stock you've chosen. what do you say to that? investors, particularly individual investors, listen to cramer. >> yeah, so i would say they, again, the data just don't support that. if you look at performance, if it's that easy, active managers would be winning, and they are
not. reason they are not is when you add it up, everything's going to add up to the market, so all your active management together has to add up to the market just like all your interest together does. then the real differentiator is the cost factor, and you're paying more on average, you're going to end up with less than an active product. >> go ahead. sorry. >> if you can identify those stocks that are mediocre consistently and avoid them, you're an all-star. there are a few who have done that over time. we have a few who work for us in our active side, but it's very, very difficult thing to do. >> let me conclude, number one, we reported on a competitor of yours coming out with a lever e leveraged etf that could go long or short. i wonder if you think that's a responsible product, joist, the
kind of thing that ought to be out there for people to choose from. others say, well, you want it, here it is. make a smart decision about it. basically, the question is, have we sliced the bologna too thin, and what's stocks and bonds markets? >> sure. the first one, you know, tyler and i have talked about this every year at the conference, we've been together, i think it's getting ridiculous. i don't think introducing leverage into these products is good for the end investor. i feel far too few people understand it. i'm not a fan of those at all. on the outlook, as you know, we tend to look at things very long term, and over the next ten years, we expect equity returns to actually be, you know, 2-3% below the long term average. fixed income we also expect to be a couple percentage points below its long term average. you see that in the yield and
maturity. take that together, balanced return is, look, less than has been over the last 30 years. the consequences for all of us, one, be really clear in educating investors about this, and, two, help people find ways to save more. >> thank you for the time, bill. bill mcnabb, chairman and ceo of vanguard. we'll be right back. our brains so we can share our amazing trading knowledge. that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders? i know. your brain told my brain before you told my face. mmm, blueberry? tap into the knowledge of other traders on thinkorswim. only at td ameritrade. shis it dna or olay? er than she should. new olay regenerist helps take years off your skin age so you can look younger. who needs dna when you have olay? new regenerist.
eastern time. this is a live shot of the rose garden where remarks will be made. members of the house were bussed in for the occasion. we are watching for that half hour's time. thank you for watching "power lunch." >> interesting couple hours. >> absolutely. "closing bell" starts right now. ♪ >> what an interesting couple hours it will be here. the stock exchange. >> in case you have heard, the house passed the amended bill to replace obamacare. >> bill pass, without objection, the motion to appeal is laid upon the table. >> we will tell you what's in the bill, what it meebs ifs hospital -- means for hospitals and insurers, two stories, by the way, and the president's agenda and what the cost of the bill could be, although, that's still to be determined. president trump, by the way, will be speaking at the white house in less than 30