At the core of the ongoing government shutdown is a fight over the decision to end subsidies that let some 12 million Americans and legal immigrants get affordable healthcare coverage. To understand why this is so important, BBTW editor Peter Green spoke with long-time health care executive John Driscoll, who is now board chair of the University of Connecticut’s health care system.
Peter Green: One of the main arguments behind the shutdown is over extending government funding of health insurance for American citizens and legal residents. Why does this matter so much?
John Driscoll:Right now, over 7 million people will lose their subsidies, and around 5 million will lose their health insurance completely. And the way the reductions work is you’re reducing the higher coverage levels, which typically are the healthier people. At a time when health insurance costs are going to go up, you’re taking the better risks and throwing them off the rolls, which will increase the cost going forward for healthcare in general. In addition to destabilizing the marketplace by taking so many people off the rolls so quickly, you’re also changing the risk profile of the underlying covered lives.
How does that work?
What they’re doing is cutting the ACA subsidies for over 400% of the federal poverty level [Currently $32,150 for a family of four]. As you increase the number of people who make more money in the subsidy pool, your risk profile decreases. In addition, with 5 million people losing coverage, what happens is they don’t stop getting care; they just get care when they’re very sick.
How does that raise costs?
Those 5 million-ish people will end up accessing care through emergency rooms, getting hospitalized at the highest possible cost level. We know that uninsured people are 40% more likely to die because they don’t have access to primary care or specialists, and only half of them take the drugs that they’re prescribed. It’s a doom loop.
But isn’t Obamacare too expensive?
Obamacare was really a public-private compact to extend coverage, but without funding, it’s not like the private sector is going to run in. And the irony here is that two-thirds of those who are the beneficiaries of enhanced subsidies are living in red states.
So how do we keep healthcare costs down? The U.S. spends about $14,000 a year per person, while the European average is about $7,500.
We don’t solve high costs in the healthcare system by dumping people off of insurance, particularly when the trade is lower taxes for millionaires and billionaires. Your mortality is much higher if you’re uninsured.
What do you do to bring costs down?
Uncovered people are by definition more expensive. And you have to solve the problem of extremely high prescription drug costs, and then invest in chronic care and chronic care support. If you cover everyone and can bring down the cost of prescription drugs, and you start to actually invest in integrated chronic care, you could substantially reduce the cost trend.
Integrated chronic care? How does that work?
You give me a budget, but I get to manage all the costs. The only way you reduce the excess costs and the excess trend is if you manage all the costs through one clinical entity that has its patient care at the center. Everybody’s got to get covered and everybody’s got to have access to care they can afford. Otherwise more people are going to suffer. And that shouldn’t be true in the richest country in the world.
This interview has been condensed and edited.
—Peter S. Green
The usual suspects
- Forget the Singularity, it’s the Circularity. Are the multiple trillions of dollars in AI spending a virtuous circle, or just a shell game of circular financing, where Nvidia $NVDA ( ▲ 1.42% ) invests in OpenAI, which then uses the money to buy…Nvidia chips? That’s increasingly what it looks like. The whole machine is built on the premise that a lot more companies will be using a lot more AI, and that they’ll need huge data centers, using vast numbers of chips to make it all happen. But if the demand isn’t there fast enough, or isn’t even there at all, that’s a lot of debt that won’t get serviced, and massive capital expenditures that won’t get amortized. It’s “a bit odd,” hedgie Jim Chanos wrote on X after a recent deal between chipmaker AMD $AMD ( ▲ 1.43% ) and OpenAI, “that when the narrative is ‘demand for compute is infinite,’ the sellers keep subsidizing the buyers?”
- I phone, you phone, we all use our iPhone: Apple $AAPL ( ▲ 0.52% ) shares hit a record Monday after a report that sales of the new AI-powered iPhone 17 outsold the iPhone 16 by 14% in its first 10 days on the market. Shares rose about 4% on the news before dropping slightly, and Apple briefly had a market cap above $4 trillion.
- Sing along with Netflix $NFLX ( ▼ 0.05% ) : The streaming app said third-quarter revenue rose 17%, and profits rose 8%, largely on the back of tween sing-along sensation “KPop Demon Hunters,” the Sony Animation film released direct to streaming that’s gotten 325 million views since its late August release. The movie also sparked a cinema renaissance, as the top box office draw on its one-weekend theatrical release. Merchandising deals with Mattel and Hasbro were announced this week, and co-CEO Ted Sarandos said sing-along parties were boosting viewership. But despite the good news, higher expenses and some tax issues mean operating margins are falling, and strong competition from Amazon $AMZN ( ▲ 1.46% ) , Alphabet’s YouTube $GOOG ( ▲ 1.0% ) , and Paramount $PSKY ( ▲ 0.63% ) sent shares down nearly 10 percent after the earnings report.
- It’s coming for your job, and it’s not AI: Amazon $AMZN ( ▲ 1.46% ) plans to replace 600,000 jobs by 2023 and replace them with robots, according to internal company documents viewed by the New York Times. The company now has 1.2 million workers, and the documents show that filling new jobs with machines would save 30 cents on every package. The end goal is to automate 75% of its operations. Amazon doesn’t release the number of items it ships from its warehouses, but it processed 6.3 billion U.S. delivery orders in 2024. Amazon called the documents “incomplete.” If Amazon goes ahead, warned Nobel-prizewinning economist Daren Acemoglu of MIT, “one of the biggest employers in the United States will become a net job destroyer, not a net job creator.”
- AI, yei yei! AI is coming for your job, at Meta $META ( ▼ 0.03% ) . Chief AI officer Alexandr Wang just fired nearly 600 employees, according to a memo seen by CNBC. The cuts largely target people working in AI before CEO Mark Zuckerberg poured $14.3 billion into Wang’s Scale AI, and appear to cement Wang’s role as Meta’s chief AI geek. With the cuts, Meta’s got about 3,000 people working on AI, in what it calls the Superintelligence Labs. Not that this will do much to hurt Wang. Forbes says’s he’s worth $3.2 billion.
- Luddites or prophets? Top tech pioneers and AI leaders have signed on to a public statement warning that super-intelligent AI could destroy the world, and urging a halt in AI progress until there’s a consensus that it can be built and controlled safely. AT least 26,000 people have signed the call, including Apple cofounder Steve Wozniak, Virgin founder Richard Branson, and AI pioneers including Yoshua Bengio, Geoff Hinton, and Stuart Russell. Even Trump-friendly media figures Steve Bannon and Glenn Beck, and of course, the singer Kate Bush, have joined the call.
The media mirror
- A would-be mogul sinks Warner: That’s it for media dealmaker David Zaslav, who merged the Discovery Channel with Warner Brothers to create Warner Bros. Discovery $WBD ( ▲ 3.73% ) , and made himself one of the powerful moguls of Hollywood, lording over everything from DC Comics and HBO to CNN and Warner Bros. Pictures. Alas, the deal failed to produce the promised results, and on Tuesday, Zaslav said what Hollywood’s known for months — the shop’s for sale. Chief among prospective buyers is Larry Ellison’s son David, who just last month completed the purchase of Paramount Studios and CBS from fellow nepo-mogul Shari Restone. So far, WBD has rejected three offers from Paramount $PSKY ( ▲ 0.63% ) , the last for $24 a share. Analysts say the studio’s worth at least $30 a share. Amazon $AMZN ( ▲ 1.46% ) , Netflix $NFLX ( ▼ 0.05% ) , YouTube (part of Alphabet’s Google- verse) $GOOG ( ▲ 1.0% ) , and even NBC-Universal owner Comcast $CMCSA ( ▲ 0.15% ) are also reported to be bidding for all or part of WBD. WBD shares are down some 60% since Zaslav took over in 2021. Some of that’s due to a changing entertainment industry, but a lot of it’s due to the debt taken on to combine the two companies and some really bad decisions, like losing the exclusive rights to NBA games. What happens next will depend a lot on whether regulators will allow more consolidation, and those regulators happen to be the same ones who just approved Ellison’s purchase of Paramount.
Car talk
- Chip Challenged: A move by the Dutch government last month to take control of Chinese-owned chipmaker Nexperia has rattled the car industry. Nexperia chips are used to control everything from lights to brakes, and the Dutch takeover, for national security reasons, prompted the Chinese government to ban the export of some Nexperia chips that aren’t made in Holland. Mercedes $MBGAF ( ▲ 0.79% ) said it’s secured a short-term supply of chips, and Volkswagen $VLKAY ( ▼ 0.99% ) said it could be forced to temporarily halt some production. Shares in both Mercedes and VW were down more than 2% on Wednesday.
- U.S. EV maker Rivian $RIVN ( ▲ 1.32% ) says it’s laying off more than 600 people, about 4% of its workforce, hammered by the expiration of the EV tax credit and changes in the sale of climate credits, which could cost it $100 million. Rivian’s EV sales grew 32% to 13,201 vehicles in the third quarter, and it plans to introduce a lower-cost, $45,000 SUV “soon.”
- GM $GM ( ▼ 0.54% ) surprised analysts and investors with higher-than-expected revenue and profits in the third quarter, pushing its stock up 15% Tuesday, its best day since 2020. Tariffs on imported medium- and heavy-duty trucks helped, the company said, but the numbers don’t include a $1.6 billion charge for cutting back EV production. Nor do they include the cost of killing 1,200 jobs in Canada and halting production there of the BrightDrop electric delivery van, after 25% tariffs on Canadian-made vehicles and no more subsidies for EVs.
The short stack
- Meme gets cooked: The latest meme stock to grab the market’s attention, Beyond Meat $BYND ( ▼ 17.04% ) , the faux-burger brand that’s been unable to compete on price with he real thing, soared 625% from Monday to Wednesday, topping out at $7.69 before crashing back down some 60% to around $3 on Thursday morning. What drove the stock? First, it was added to a meme index, but second was a big short squeeze. That’s still left the shares up 400% in the past five days.
- Kelce Koaster? Shakeup fund Jana Partners has teamed with TayTay fiancé Travis Kelce to buy a stake in Six Flags $FUN ( ▲ 2.04% ) , promising to revive the stalled theme park operator. Kelce says he grew up going to theme parks back home in Ohio, and wants to help breathe some life into the tiring brand. Six Flags shares rose nearly 20% on the news.
- All bets are on: The NHL has a licensing deal with sports betting markets known euphemistically as prediction markets, Kalshi and Polymarket. The deal lets the two use NHL logos and data. But rival gambling sites, like FanDuel and DraftKings, say the prediction markets violate state gambling laws and are too loosely regulated. The NHL hit back saying that the more access fans have to betting, the better for everyone. Prediction markets say they’re really option exchanges and are regulated by the federal Commodity Futures Trading Commission. The Feds have been concerned about gambling on games, and on Thursday arrested Miami Heat guard Terry Rozier and Portland Trail Blazers head coach Chauncey Billups for allegedly taking part in a complex Mafia-linked sports gambling scheme. What are the odds?
Trumplandia
- Tariff costs: A new study released by S&P Global says two-thirds of the cost of the Trump tariffs is going to be passed along to consumers, and the total price: $1.2 trillion for 2025 alone. The rest will hit business. “Tariffs and trade barriers act as taxes on supply chains and divert cash to governments; logistics delays and freight costs compound the effect,” wrote the report’s author, Daniel Sandberg.
Elon’s world
- Tesla’s tumble: It was not a good quarter for Tesla $TSLA ( ▲ 1.93% ) , even as expiring EV credits pushed many American drivers to finally buy that Model Y. Price cuts slashed profits by 37%, as overall revenue rose 12% to $28 billion, with revenue at the battery storage unit up 44%. But investors’ doubts about Tesla’s ability to keep up the sales growth without a new model sent shares down 5% by midday Thursday. Musk said in a conference call on Wednesday that self-driving cars will power Tesla to a record. “Honestly, it will be like a shockwave,” he said. The real shockwave may be Elon’s pay package: Next month, shareholders will vote on a proposed $1 trillion pay package — awarded if Tesla hits some gargantuan targets over the next decade. Shareholder advisory firms ISS and Glass Lewis are urging a no vote, but Musk says he’ll walk if shareholders turn him down. The proposal would leave him with 25% of the company, up from his current 13%. Still, he’s not hurting. He was worth $487 billion on Wednesday, according to Forbes.
- Petty cash: Trying to find more cash flow at his companies, Musk has had SpaceX and xAI buy fleets of Tesla cybertrucks. With a production geared for 250,000 trucks a year, and sales that have fallen below 20,000 trucks, that may be the only way to clear a buildup of inventory.
- X-ing out SpaceX? Travelling at the speed of Elon may not be fast enough for NASA, whose chief, Sean Duffy said the agency could go back to the moon using lunar landers not made by Musk, noting that SpaceX is far behind schedule on building a viable moon lander. “We’re not going to wait for one company,” Duffy said on Monday. “Sean Dummy is trying to kill NASA,” said Musk.
- Secret Sats? What’s that secret SpaceX network of spy satellites being run for the U.S.’s National Reconnaissance Office? That’s what amateur satellite tracker Scott Tilley says he’s discovered from his home in Canada’s British Columbia. In a published paper, Tilley says he’s found radio transmissions from the Starshield Constellation using low-tech radio spectrum to beam detailed photos back to Earth. Crucially, Tilley says he’s found “no evidence of authorization” to use the bandwidth, suggesting it’s not meant to be noticed. Shhhh!
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Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story.
