CBS This Morning was the sole Big Three morning newscast on Thursday to report that delivery company UPS was cutting health insurance to 15,000 spouses of employees due to the rising costs related to ObamaCare. ABC's Good Morning America and NBC's Today both failed to cover this latest development concerning the controversial law [audio available here ; video below].
The CBS program devoted a news brief and a two-and-a-half minute segment to UPS being "one of the first major companies to directly blame ObamaCare for changes in coverage." When host Gayle King wondered if the company's move was "a bad thing to do," analyst Mellody Hobson actually replied that "it's actually not, because, at the end of the day, the spouse will be covered."
King gave a 22-second news brief about UPS's move 13 minutes into 7 am Eastern hour of the morning show:
GAYLE KING: UPS announced it will cut off health benefits to the spouses of 15,000 employees. The package delivery giant says the federal health care overhaul is driving up its cost. It's one of the first major companies to directly blame the Affordable Care Act for changes in coverage. UPS says the cuts apply only to spouses who can get health care coverage through their own employers.
Just over 50 minutes later, the anchor and co-host Charlie Rose brought on Hobson to discuss the issue. Rose first asked, "How significant is this move by UPS, in terms of what impact it might have on other companies?" The CBS contributor replied that "this is actually a really big move", and continued that "it's going to give a lot of other big employers permission to do the exact same thing."
After King tossed her "bad thing to do" question, Rose followed up by wondering if UPS's decision might "feed the controversy over ObamaCare". Hobson answered by outlining that "it really does get to this whole point that has been a huge debate about the costs...The one thing that is key to this issue for the White House, is they need young people to be covered....But the question will be, will the young people say, instead of coverage, I'll just take the penalty which, in the beginning, won't be very much, but over the long term, will rise to be quite significant."
The full transcript of the Mellody Hobson segment from Thursday's CBS This Morning:
CHARLIE ROSE: UPS says it will drop 15,000 spouses of employees from its health insurance plan. The package delivery company says one reason is the cost of the Affordable Care Act. UPS is one of the first major firms to directly blame ObamaCare for changes in coverage.
CBS News contributor and analyst Mellody Hobson is in San Francisco. Mellody, good morning.
MELLODY HOBSON: Good morning.
[CBS News Graphic: "Cutting Health Coverage: UPS Drops Working Spouses From Insurance Plan"]
ROSE: How significant is this move by UPS, in terms of what impact it might have on other companies?
HOBSON: This is actually a really big move. So, they are a major employer. They employ almost 400,000 people. They've been very direct about why they're doing it – money. They say this move will save them $60 million. Their health care costs have been escalating about seven percent a year. But next year, they're saying they're expecting 11.25 percent, and they say they just can't afford it. I think, at the end of the day, it's going to give a lot of other big employers permission to do the exact same thing.
[CBS News Graphic: "UPS Insurance Plan Changes: -Drops 15,000 spouses of non-union workers; -Affects spouses who could be covered at own jobs; -Saves $60 million; Source: USA Today"]
ROSE: Exactly, and they'll use ObamaCare as a – as a sort of reason for doing things that they wanted to do anyway.
HOBSON: That's right.
GAYLE KING: But does it make sense, though?
HOBSON: Well, you know, the one thing-
KING: Go ahead, Mellody – go ahead.
[CBS News Graphic: "UPS Estimate Costs: Affordable Health Care Act: -$65 per covered employee; -Research & start-up fees; -15,000 fewer covered employees = $975,000; Source: Kaiser Health News/USA Today"]
HOBSON: The one thing I was going to say, is I think, at the end of the day, employers want healthy employees. They want people to have coverage. They're just struggling with how to pay for this.
KING: Is it a surprise, though, that a company would cut health care costs if – if your spouse can get it at other places? Is that a bad thing to do?
HOBSON: It's actually not, because, at the end of the day, the spouse will be covered. But those days of where you used to sit down with your spouse and go over each other's benefit plans and pick the best one – those days are probably over. You won't have that option on a going-forward basis in many companies.
[CBS News Graphic: "UPS Memo To Employees: 'Since the Affordable Care Act requires employers to provide affordable coverage, we believe your spouse should be covered by their own employer.'"
ROSE: How does this feed the controversy over ObamaCare?
HOBSON: Well, I think it really does get to this whole point that has been a huge debate about the costs, and saying it's too expensive to cover all these people. The one thing that is key to this issue for the White House, is they need young people to be covered. This is extraordinarily important, because the more young people that go into the system – who have very little need on an ongoing basis for health care, especially in their early years. That helps supplement the cost of people in later years, who need more health care. So, young people going in will be extraordinarily important, and hopefully, that will pull back some of the controversy. But the question will be, will the young people say, instead of coverage, I'll just take the penalty-
[CBS News Graphic: "Average Employer Health Care Costs: -$9248 per employee in 2013; [up] 5.1% from 2012; Lowest increase in 15 years; Source: Towers Watson"]
HOBSON: Which, in the beginning, won't be very much, but over the long term, will – will rise to be quite significant.
KING: All right. Mellody Hobson, thank you very much.