FTC Chair Andrew Ferguson’s Big Plans for Big Tech 3/13/25
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Hi, I'm CNBC producer Katie Kramer. Here's what's coming up today on Squawk Pod. A big interview in Washington on antitrust policy. So you're not backing off of Amazon? Unequivocally, no. Our own Eamon Javer sits down with the new chair of the Federal Trade Commission to talk big plans for big tech. I'm a law enforcer. My job is to make sure that everyone is complying with the antitrust laws. And if they aren't, we go to court.

And healthcare industry veteran Mark Bertolini is attempting to improve the messy, frustrating insurance system. And there's a lot to improve. Last year, Americans borrowed $74 billion to pay for their health debts, even though they had coverage. And one in five people under 39 had problems with their medical coverage and had to borrow money.

Those big conversations plus two astronauts still in space. Jamie Dimon has a word of caution on consumer spending and keeping the government open and funded. The GOP-led House might have agreed on a continuing resolution, but in the Senate, there's a group of dissenters. They're saying it's not clean. I don't know. It's Thursday, March 13th, 2025. Very special day for some people. Squawk Pod begins right now.

Stand Becky by in 3, 2, 1, cue, please. Do you need a calculator? Yeah, probably. Becky's trying to figure out how long she's been married. I don't know. Andrew knows. How long Becky's been married. No, how long you've been married. One year before her. One year before her. So he doesn't know either. All right, well, we will. I don't know, it's been a while. We're all ancient, and we've been together longer than many marriages. We have. When we go to break, I'm going to do big balloons, everything.

Oh, that's so nice. Picture. Okay. Is that all right? We'll get ready for all of it. We'll let the rest of you in on this secret when we get back a little bit. Good morning, everybody. Welcome to Squawk Box right here on CNBC. We're live from the Nasdaq market site in Times Square. I'm Becky Quick, along with Joe Kernan and Andrew Ross Sorkin. And here we go this morning. Yesterday, things evened out a little bit, at least for the S&P and the Nasdaq. Dow was down for the third day in the row. And for the week, the Dow is now on pace to be down by 3.4%.

You did see a little bit of a gain for both the S&P 500 and the NASDAQ, not massive gains by any stretch. Did I win or it's sort of a draw? It was mixed. I thought it would close higher, but the S&P was up almost 30 and the NASDAQ was up over 100. Yeah, it was up 27 points for the S&P. The S&P 27 is not... Kissing your sister. That's not so bad. It was up half a point.

of a percent. But when you're down 9.6 percent and you go up 27. It kept you from going into correction territory. Thank you. So you can take that on it. The NASDAQ was up by 212 points. The NASDAQ was up by 212 points for a gain of 1.2 percent. But for the week today, both of the S&P 500 and the NASDAQ are still down by about 3 percent. This morning, you see some green arrows.

Who wants to pick the fighter to shut the government down? You're hoping that other Democrats will join along with you and not shut down the government, correct? I'm saying that that's the choice. And you can either vote for the CR and not, you don't have to, that means you don't agree with all of it. It's just that we agree that you don't want to shut the government down. The Democratic leader. Funding the government should be a bipartisan effort, but Republicans chose a partisan path

drafting their continuing resolution without any input, any input from congressional Democrats. Because of that, Republicans do not have the votes in the Senate to invoke cloture on the House CR. Our caucus is unified on a clean April 11th CR that will keep the government open and give Congress time to negotiate bipartisan legislation that can pass.

We should vote on that. I hope, I hope our Republican colleagues will join us to avoid a shutdown on Friday.

Senate Minority Leader Chuck Schumer saying the Democrats in the upper chamber plan to reject a government funding bill that Republicans passed in the House. Now, without a funding solution by tomorrow night, the government will run out of money and shut down. Schumer calling on Congress to pass a one-month temporary spending bill to keep the lights on in D.C. However, last night, Senate Majority Leader John Thune took the first procedural step towards senators considering the House-passed bill. That's likely to happen tomorrow.

midday tomorrow. I've heard from Rand Paul. He was making it so that an additional Democrat would have to support it to get to 60. Well, Fetterman basically takes his spot. Fetterman, the Democrat, has said that he would vote for him. Like everything in Washington, it

Normally, a clean bill would be something that the Democrats always want, a clean CR or whatever it is. They're saying it's not clean. I don't know. I think the difference is it's a year-long CR. You haven't had that since 2013, but it's not completely unheard of to have a year-long CR.

There's something in it that would allow the Trump administration, I think, to have more say over the money, be able to cut more, and have Congress come back and have to rectify that later instead of thinking that it starts with Congress and some of the Democrats have a problem with that. The big issue is that the House has left town. So if they don't take what the House has offered up, there's going to be complications. And it gets so tiresome as both sides...

constantly are hoping that they get something like this so they can say it's the other side's fault. Right. The truth is, it's both of their faults. As their approval is 6%, they're trying to, you know, gain a little advantage on something stupid like this. No one, I don't think people, people at home just want to

Well, there's been a lot of consternation. Yesterday, there was a meeting among the Democrats that, according to Politico, at least, evolved into some F-bombs being dropped, some yelling behind closed doors. I think we should legalize the F-word. I mean, after the Democrats, like last week, every one of them used it. They look like schoolteachers, a couple of them that were talking. They look so concerned, and they just let loose. So can we legalize it? You know what?

- F no. - I'm gonna take the initiative right now. - No, do not. - Don't do it? - No. - Will you help me? - You're on your own. - You're not even gonna think. - Walk the plank on your own. - You should've said F no, what you should've said. That would've been funny. - Would've been. - That would've been funny. - That's what I said 12 seconds ago. - Oh. - And you ignored me. - But he said it, he said it-- - So crazy. - He said it this way.

JP Morgan CEO Jamie Dimon sounding a note of caution on the U.S. consumer. Dimon spoke at BlackRock's retirement summit in Washington.

Obviously, if you look at the economy today, you see a weakening. Consumers are still spending money. Jobs are still plentiful. Wages are still going up. CPI has kind of leveled off a little bit. But you do see a weakening in sentiment, certain spend, certain type of spend that people consider more discretionary. And what changes that is hard to tell. I don't think the average American consumer who wakes up in the morning and goes to work, which there are like 175 million of them,

Changed what they're gonna do because they read about tariffs. So I just questioned that a little bit Diamond said in his view geopolitical concerns are much more important than economic ones in the next six months to a year But you could argue that some of those economic concerns could become geopolitical ones because the cold wars of tariffs and things could turn into that is kind of a precious is kind of an interesting point Jamie diamond makes if

But when the tariffs do go in and you go in and things cost more, it might hurt consumer sentiment. But just the specter of that eventually, why would that hurt consumers? If I was in the market for a car, I would buy it immediately. You might buy it now. I would buy it now. Well, no, but I think there's two issues. It's that, and if you're Ford, even though Ford hasn't, it may not feel like it's hitting the consumer yet, it will.

Because they're hoarding parts. They're having to bring supplies over at a huge cost to them. And prices might go up even before. Right. So the point is you can put tariffs on. The prospect of tariffs unto themselves for certain types of industries actually do have a cost. But we're talking consumers. And I just don't think consumers decide. I don't think consumers. No, I agree. Consumers are not sitting there making that comment. That's what Jamie said, right? But the business leaders are.

And the business leaders are not only doing that, they're also then sitting on their hands because they don't want to make their own investments, which also means that they're not employing people. I mean, yes, the consumer is not feeling it right this second yet, but by default you would later. You feel it if there are concerns at your company.

If there's word being put out that that project we were going to go ahead with, we're gonna hold off and wait and see. That makes consumers nervous if you're seeing that at your job. Fair point that this is not the first thing 175 million Americans think about every morning. They're not watching this and looking at every single push along the way.

But they may notice that their 401k is down over time. What he said at the beginning, though, is that you are seeing weakness, generalized consumer weakness. That could be from the storms. That could be from them spending a lot of money over the holidays and saying they were going to take a little bit of a pause from it. It could be from fires. There's a lot of things that have happened. And between now and April 2nd, how many machinations do you think we'll have? How about between now and 4, 4.30? Between now and 4 o'clock.

Two astronauts stuck in space for months will have to wait at least a little bit longer now before they make their way home. SpaceX scrubbing what was a planned launch for four astronauts heading into the International Space Station today, blaming the delay on a launch pad issue. The company said in a post on exit it's targeting now another launch that they say will happen no earlier than tomorrow.

Plans call for relieving the astronauts currently on the space station and sending Americans Butch Wilmore and Suni Williams home. They've been stuck up there on that station now for nine months after a trip there on Boeing's faulty Starliner spacecraft last year. That mission originally scheduled to last eight days and a lot of hope to get those astronauts back on board.

on the ground. It's just a reminder that that is not a normal job. Can you imagine you were going to Washington or Omaha for two or three days and oh, by the way, nine months later, you're still not back? I wonder how long really the muscle tone and things like that. They had Mark Kelly up there for like a year or something, right? And it did have an impact. He's a twin and when he came back, there were differences to his body mass because when you come back and all of a sudden gravity hits you full force. No gravity. The freeze-dried food.

You can't shower up there, right? You can't shower or anything up there. Well, they've got the toilet that goes... It's a crapshoot. Literally. Where would be your first visit when you got home? Home? Yeah, I know, but then where? Sal's Pizza? Taco Bell? I don't think there's anything I'd miss that much, but...

Just my family. I know. I know. Well, you're going to be there's going to be a reunion. I wouldn't leave my house. Italian go hard on carbs. Hard on carbs. Yeah. After eating that stuff. What is that stuff they're eating up there? It is amazing, though, that washing everything down. The idea of success is coming home. All that tang. I'd never drink tang. We alluded to this.

A little bit. And it's an anniversary for me, and it's 27 years. You and Penelope, 27 years. It's 27 years. And I would contend that is Hualalai, was where that was. We played golf, actually, that day. Friday the 13th. It wasn't just the 13th. It was Friday the 13th and a lunar eclipse. So we wanted to stack, you know, stack everything together. I think anniversaries are more important than birthdays. I mean, birthdays, if you don't die...

you will have a birthday, right? You don't have to do anything except just make it to your birthday. Anniversary are achievements and from all good things, I think, come

That's true. This is true. Finding the best, finding great partners. What else is there? So happy anniversary. Happy anniversary to me and mainly to Penelope, who, you know, me putting up with it is not that big a deal. But she deserves accolades. Love you. We'll be right back. Tease will be next.

To see a picture of those two crazy kids, Joe and Penelope, on their wedding day, check out Joe Kernan's feed on X. His handle is at Joe Squawk. Happy anniversary. Coming up next, the new head of the Federal Trade Commission has a markedly different approach from his predecessor, Lena Kahn. Andrew Ferguson, in his first CNBC interview, on his role as a law enforcer. If we've got a merger or

conduct that violates the antitrust laws, and I think I can prove it in court, I'm going to take you to court. And if we don't, I'm going to get the hell out of the way. More SquonkPod is just ahead. When your schedule is packed, it can be difficult to put a wholesome meal on the table. That's where HelloFresh comes in.

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Welcome back to Squawk Pod. It's March. We're still getting to know President Trump's picks for leadership across his new administration. Treasury Secretary Scott Bessett, we have heard from in several media interviews. Same with Commerce Secretary Howard Lutnick and even Education Secretary Linda McMahon. And interviews with all three of those can also be found in recent days in your Squawk Pod feed. Please check it out.

Today, we're talking to the president's pick to lead the Federal Trade Commission, Andrew Ferguson. He replaced the often vilified Lena Kahn. Fun fact, guess where you can find Lena Kahn's exit interview from the FTC? Yep, on your SquawkPod feed. Just search. Andrew Ferguson is a vocal critic of big tech and other corporate concerns. His first act as chair was closing the commission's DLF.

DEI office. On X, Ferguson has even gone so far as to refer to the, quote, tyranny of big tech. And as the new cop on the beat, so to speak, he's picking up a legacy of litigation. In 2023, the FTC sued Amazon for deceptive practices to

to amass Amazon Prime memberships. And in an awkward couple of hours just the other day, the FTC requested a delay to proceedings, citing resource constraints, but then later reversed course. There are, in fact, enough resources. A bit of a swing there. Another tech giant in the FTC cites Meta. The two are going head-to-head in an antitrust trial set to begin next month, zeroing in on the Facebook parent's acquisitions of WhatsApp and Instagram.

The FTC chair, Andrew Ferguson, sat down in Washington with our own reporter, Eamon Javers. Within 48 hours of some comments he made to CEOs at a private meeting leaking to the press, the gist of those comments? Ferguson said he wants the FTC out of the way of legal dealmaking. He makes his case now. Eamon Javers kicks things off.

I'm sitting here with the new FTC chair, Andrew Ferguson. Andrew, thank you so much for being here. Fascinating time to talk to you because so many headlines involving your agency right now. And we had this dramatic moment earlier in the week where you were at a CEO event, the Yale CEO Conference, which was supposed to be off the record. I was in the room. You were talking to some of the biggest CEOs in the world, including Jamie Dimon and others.

And then somebody recorded it and leaked some of the comments about your overall worldview on the FTC. I want to go to your overall worldview on the FTC, but before we do that, I want to do a quick whip around of some of the big tech cases that you guys are facing, because so much of what you're doing impacts the stock prices of so many of these companies.

Starting with Amazon, yesterday there was this fascinating moment where you guys filed in court and said, "We need to delay our Amazon case because we don't have the resources." And then like a couple of hours later, you filed another filing saying, "No, actually, we were wrong. We're sorry. We do have the resources." Can you explain what happened there? - Sure, and thanks for having me. Didn't file anything saying we didn't have the resources. Lawyer was talking during hearing. The lawyer was wrong. The lawyer said he was wrong in the filing.

I've said since day one, big tech is one of the main priorities of the Trump-Vance FTC. It's one of the reasons the president appointed me to this position. I've said since day one, every resource necessary to litigate these cases is available, will be made available. That remains true. That's why the lawyer filed what he did after he said what he did. He was wrong. We've got the resources. We've had them since day one. We're going to litigate these cases. So you're not backing off of Amazon?

unequivocally now. - Microsoft, yesterday Bloomberg reported that you've opened an investigation into Microsoft. Can you tell us where that investigation stands right now? - Well, we're a law enforcement agency, so I'm not allowed to talk about stuff going on within the agency. But I can say President Trump appointed me to protect Americans in the marketplace, and that includes from big tech

And I've said since day one, big tech is one of our main priorities, and that remains true. And the other big question is Facebook. You've got a case scheduled to go to trial in April, I believe, involving Facebook. And yesterday we saw Mark Zuckerberg at the White House. We don't know exactly what Mark Zuckerberg was talking to people at the White House about, but he is a fascinating figure because he's done this interesting political pitch toward MAGA.

and he has become friends with Elon Musk, he's become friendly with the president and the administration. If the administration came to you and said, "Hey, wait a second, you know, we kind of like Zuckerberg now, dial it back on Facebook," would you do that?

President Trump launched this suit against Meta in 2020. It's been litigated out for the last five years. I'm a law enforcer. My job is to make sure that everyone is complying with the antitrust laws, and if they aren't, we go to court. So the politics of all this is sort of above my pay grade. I see my job as pressing litigation where we have it, enforcing the antitrust laws across all the markets, taking big tech very seriously, and that's what we're going to do. So you don't see Facebook as off the hook here either?

We've got a trial coming up. The team's getting ready. We're pressing toward that. Let me ask you about, we had this sort of only in Washington drama about the secret recording at the CEO event earlier this week. You know, leaving the recording aside, I'm fascinated by your comments because I was in the room for that.

And you sort of laid out your approach to the FTC and to antitrust and sort of big corporate power in that room. And I want to see if you can do that for our audience on live television, because I think it's different than what a lot of folks on Wall Street have expected from a Trump FTC.

After the election, there was a lot of talk that the Trump FTC would be open season for M&A, for big companies to do what they want. You don't see it quite that way. And I wonder if you could explain what the difference is between what Wall Street expected and what you're doing. Sure. This is a free market administration. But one of the most important ways we keep our markets free in this country is vigorously enforcing the antitrust laws.

If we've got markets infected with monopolies, with collusion, with foreclosure, the markets aren't free. They don't work for ordinary Americans. President Trump won this election because ordinary Americans were fed up with the way that the country was working. And I see it as my job at the FTC to vigorously enforce the antitrust laws to protect ordinary Americans. But I've talked with a lot of people in the business community, and one of the biggest objections they had with the previous administration's antitrust regime was,

They never quite understood what was going on. There was a lot of unclarity. There was a lot of uncertainty. I see it as one of my jobs to provide regulatory certainty, regulatory clarity. And here's what I want to say about that.

If we've got a merger or conduct that violates the antitrust laws and I think I can prove it in court, I'm going to take you to court. And if we don't, I'm going to get the hell out of the way. The FTC is not going to try to use sort of sub-regulatory means to hold up mergers without actually taking people to court and hope that they die on the vine.

That's over. If we think it violates the laws, we're going to litigate. And if it doesn't, we're going to get out of the way and we're going to let markets do their thing. We want the economy to grow. We want it to be vibrant. We want it to be dynamic. We want it to be innovative. That's how we're going to get out of this debt crisis. The FCC can play a role in that by enforcing the antitrust laws, make sure they work for everyone. But if you're not violating the law, the FCC is going to get out of the way.

Andrew Ross Sorkin back in the studio has got a question for you. So let's hear it.

How should people think about sort of these political elements, which historically I don't think were necessarily, though maybe you'd argue they were, considered in the overall decision to pursue these transactions or not? Yeah.

Yeah, President Trump appointed me to enforce the laws and to enforce them without fear or favor. My own view is the politics are all beside the point. My job is to protect Americans from monopoly and to protect Americans from fraud. And I don't care about the politics of the companies involved. I care about protecting ordinary Americans as consumers and as workers from fraud and from monopoly. And so that's what I'm going to do. Politics all aside,

That's my job is enforce the law, enforce them fairly and without regard to politics. - Is that a lean economy monopoly or an actual monopoly? - That's a monopoly as the antitrust laws understand it. Look, I have no ideological predisposition against merger and acquisition activity. It's part of how the economy grows, but I do have a strong ideological preference for vigorous enforcement of the antitrust laws.

I don't want to fall asleep at the wheel and allow monopolies to raise everyone's prices, deprive us of innovation, to make our economy less dynamic. But look, I see it as my job to enforce the laws and win in court. And if I can't win in court, the FCC needs to get out of the way and let business innovate for all Americans. And what you said in that room of CEOs earlier this week was so fascinating to me because

If I'm understanding it correctly, you see consolidation of large corporate power as potentially threatening to sort of Americans' liberty in a sense of, you know, big corporations can have a social agenda that you don't agree with on whether that's vaccines or masks or Black Lives Matter issues. That's something that you see as potentially threatening to Americans. Can you explain that? Yeah, look.

Go back to 2020. If you had a view on masks that was inconsistent with how big tech felt about masks, you weren't allowed to talk about it. If you had a view on vaccines, couldn't talk about it. If you thought that changing election laws in the middle of an election was unfair, you weren't allowed to talk about it. But it wasn't just big tech censorship. That was a huge problem. Consumers couldn't go into a store without having political messages pushed in their face. And I'm

And I'm sitting in 2020 working in the Senate going, "Gosh, if companies feel like they can alienate half of their consumer base without suffering any real competitive consequences, we probably have a competition problem." But that's what I care about is competition. It's not the political messaging itself. That's not my job. My job is to protect Americans from the abuse of market power. And if market power makes it possible for companies to censor

or to push a social agenda that is really alienating to americans i care about the market power not the message that's my job as an antitrust enforcers protect americans from the abuse of market power becky wants to jump in here too yeah chair ferguson thank you for being with us i think that clarifies things in a way that i hadn't heard before and i think that may be where people are coming down on it do you look at it if you see um

let's say, woke mentality being put out there, you think of that, there must be a monopoly there because how else would they be able to alienate 50% of their population? That is very different than what we'd seen before. So if a media...

company or industry is seen as leaning one way or another, if a technology company or industry is seen as leaning one way or another, you think that is indicative of a monopoly?

- Nope, I'm not gonna treat the politics of any particular company as indicative of monopoly. But what I do care about is if companies are degrading their product quality by kicking people off because they hold particular views, that could be an indication that there's a competition problem. And that's what I care about. But it is absolutely not the FTC's job to run around checking the politics of businesses

and using that as a proxy for a monopoly. But if companies are degrading their product quality, actively trying to drive away consumers because they aren't suffering competitive consequences, it could be an indication that there are competition problems, and competition problems are my job. But I'm not walking around checking the liens of particular businesses. That's adamantly not my job.

I'm curious about the difference between you and Lena Kahn. Lena Kahn was kind of a figure of fear on Wall Street and in corporate America. And you come in and people are expecting an entire sea change here. I'm wondering just how many of the enforcement actions from the Lena Kahn era FTC you guys are going to drop or move away from.

Yeah, you know, I wrote hundreds of pages of dissents when I was a Republican commissioner under Lena, and we have big differences. And I think the two main differences are I want to either go to court or get out of the way.

A lot of business people have told me that one of the problems they had with the previous FTC was that a merger would go into the agency and it would kind of disappear and it could languish there for months and they would get the sense that the FTC's goal was to hope that the markets change, the deal would become unprofitable and the deal would be withdrawn. I want nothing to do with that. We're going to scrutinize deals the way that Congress told us to scrutinize deals and if they're illegal and I think I can win in court, I'll win in court and if they're not, the FTC is going to get out of the way and let business do its thing.

And the second thing is the FTC had a really heavy emphasis under the Biden administration on ex-anti-regulation. We passed dozens of rules over the last four years, and I voted against the overwhelming majority of them, wrote page after page of dissents on them. I don't see it as the FTC's job to be a regulator. I'm a cop on the beat. I check our markets to make sure there's no fraud, there's no monopolization, there's no collusion. If there is, I act. And if there isn't,

I stay out of the way. And, you know, the president has emphasized his deregulatory agenda. That's absolutely going to be one of the priorities of the FTC is carefully going through all of our regulations and the ones that are, you know, imposing onerous requirements on businesses and not protecting Americans. We're going to confront them and get them out of the way. And ones that were illegal when they were originally adopted. We're going to take care of those two. So you're not dropping any of the Lena Kahn era enforcement action?

Well, it's a two-two commission right now, so if I wanted to, it's very difficult. But I objected to a lot of enforcement actions, particularly at the end. There are a couple that my objections were quite vehement about. We're taking a very close look at every enforcement action that we currently have pending, making sure that they're consistent with the law and that they're actually going to protect Americans.

Can you explain your relationship to this White House? I mean, do you view it as your job to take direction from the White House? I mean, a lot of people have said President Trump is a transactional president. He's going to be in there doing deals. Do you feel that they should be sending a signal to you about which ones they want you to push on and which ones they want you to drop?

Look, President Trump is the President of the United States, and he is my boss. But he appointed me to this position to run it consistently with the principles of the free market system while also protecting American consumers and laborers from competition problems and from fraud. And I see it as my job to carry out the President's agenda consistent with the law. And so direction from the White House, you know, I'm not going to be the President of the United States.

I do work for the president. The agency is part of the executive branch. He's the head of the executive branch. But he put me here to run the agency and to follow the law, and that's what I'm going to do. Do you feel like Wall Street and corporate America generally understands the distinction that you're making between this FTC and, say, the George W. Bush FTC or the FTC of the 90s?

I think the distinction I want to draw is we're not going to be deferential to decisions made in C-suites. I see it as my job to take the antitrust laws very seriously and to have at the front of my mind protecting ordinary Americans as consumers and as workers. And that's what I go to work every day to do.

And we are going to be willing to take any business to court if we think we can win in court and they're violating the antitrust laws. But equally, we want certainty and regulatory consistency for the marketplaces. If we can't take you to court, we are going to get out of the way and we're going to let business innovate for this country.

Can you give us a sense, sort of sector by sector, how you view this? You've talked a lot about big tech and we sort of get that. What about other sectors? There's PBMs, for example, in the medical space. There's refineries in the oil and gas space. Do you have thoughts on sector by sector? I think that the FTC is going to prioritize its resources on the markets that affect ordinary Americans most in their daily lives. So big tech, all of us interact with big tech every day. That's going to be an emphasis at the FTC.

The healthcare markets, these are some of the most important markets. All of us have to use it all the time. We're an aging population, we're using the healthcare markets more. I would say those two markets are the chief emphasis of the FTC because those are markets that affect ordinary Americans every day. But the other thing I'm going to take a close look at is

competition and fraud and other consumer protection problems that affect Americans as workers. I launched the commission's first ever labor markets task force. The antitrust laws protect people who are selling their labor just as much as it protects people who are buying things. That's going to be a heavy emphasis. I want to protect Americans who are just trying to make a living and put food on the table. And I'm going to use our resources to protect Americans as workers. Fascinating conversation. Andrew Ferguson, thank you so much for being here this morning. Thank you for having me. Guys, I'll send it back to you.

Eamon, thank you. That was fascinating. We appreciate the insights on this. And I feel a lot about this. I can believe I feel so much better than the last. Right, Andrew? We had a conversation off. I guess we don't need to talk about everything. But if that just to me, it's like night and day. Is it is it if we can. But it's not necessarily. She said what she meant and did what she said. Right. Right. Which was the problem.

But it's not necessarily relief for big tech. I mean, there are a lot of necessarily. We don't want. Let's see what happens. Let's see what happens. OK, it's fascinating. And sounds better. We appreciate the interview.

Next on Squawk Pod, we go back to our studio at the NASDAQ in New York's Times Square and an important conversation on the messy, bloated, and sometimes indecipherable health insurance industry with a veteran. Former Aetna CEO Mark Bergelini, he now runs Oscar Health, which operates on the Affordable Care Act or Obamacare market. So if we could add more individuals...

to the current marketplace. ACA marketplace. ACA marketplace. 75 million people in small group and middle market employers. 20 million, 21 million gig workers in the economy. If you can put those people into that pool, it gets larger and it gets more stable.

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Get an expert now on TurboTax.com. Only available with TurboTax Live Full Service. See guarantee details at TurboTax.com slash guarantees. This is Squawk Pod. Up in Andrew. Q. You're watching Squawk Box on CNBC. I'm Andrew Ross, working along with Joe Kernan and Becky Quick. A few months ago, we spoke with our next guest about some of the problems in the health insurance industry and the issues with employer insurance. This time, we're going to try and focus a little more on potential solutions.

Joining us right now is Mark Bertolini. He's the CEO of Oscar Health. He recently wrote a letter to the House Ways and Means Committee imploring them to consider some of the solutions that he's going to talk about with us today. Mark, by the way, is the former chairman and CEO of Aetna. And Mark, most of our viewers know you, but you are now involved with a small insurance company that looks at younger, healthier people that it's covering. But you've done Aetna, so you know the broad spectrum of what's been happening.

We know pretty well that there are lots of problems. You've got some solutions. I want to dig into it because I've got questions about the solutions too. It's a little scary what you're proposing if you already have health insurance from your employer that you kind of like. Why don't you just discuss what you think is a solution to some of the problems you see out there. One of the things is employer-sponsored insurance is they buy it for everybody in their group, which means a larger network.

which gives you higher costs because a lot of providers in the system. Secondly, what it does is gives everybody an average benefit. So interestingly enough, last year, Americans borrowed $74 billion to pay for their health debts, their medical debts, even though they had coverage. And one in five people under 39 had problems with their medical coverage and had to borrow money.

Can I just ask, though, when you have a large pool, you do that so that the people who are the sickest don't wind up getting completely bankrupted. If you're talking about smaller pools, automatically I think, okay, you're going to take all the healthy people and the young people and leave the people who either are older, have cancer or some other disease, have children who need coverage because of special needs or along those things, and they get left out, and they're going to be the ones who are left holding the

the bill literally well number one the largest pool in america is the individual market the 24 million people affordable care affordable care act and and in that marketplace everybody gets the same rate regardless of their illness so there is no underwriting of the individual based on their illness and they get subsidies if they're under certain levels of the income of of the federal poverty level in order to help afford that

And so when you look at all of that together, a sick person doesn't get penalized. Healthy people get to buy what they want. 75% of all physicians in America are in the ACA. So I can find my doctor.

I can buy a plan design that fits me, where often with a large employer, I'm overinsured because I've got the coverage that covers even the sickest people on a level premium. There's no employer large enough to get the same level of risk adjustment that the ACA has.

If I'm an employer, I like what you're telling me because employers decades ago, for the most part, got rid of pensions. Those were costs that they couldn't figure out, unknowable costs that were growing at a much more rapid place than inflation. Health care is the new place for that, where companies look around and say it's outpacing inflation every year. Definitely. I don't want to deal with this. It costs too much. I would much rather pay a set fee and say, I know this is what my expenses are going to be every year.

That sounds awesome for them. It sounds a lot scarier for the employees. And I go back to President Obama when he was talking about the Affordable Health Care Act saying, if you like your plan, you can keep it. Well, not necessarily. That hasn't been the case. Well, I mean, a lot of people have cut their plans, but their plans keep going down because employer costs keep rising. In small business, middle market and small group, which is one to a thousand employees, their costs for health care are double.

what a large employer has. And that has been, I mean, what I was surprised when we spoke the other day, you said

that at least in your area in some places we have managed to keep health care costs within the rate of inflation or below no if you look at the overall ACA and its rate of increase over the last five years it's been at or below CPI and in the 1980s that was what we called nirvana and health care reform if we could ever get to a point where our health care costs rose at the same rate or less than CPI we had a good program how can that be with with the way Medicaid's been

well medicaid's not part of the aca okay so that's where that's the there's the issue right there is it not well how do you fix that what the aca and medicaid are related obviously why do so many people need medicaid and why do so many states abuse what it's used for well the funding mechanism you know the sharing between the states and federal government isn't very efficient that's what not only that but they get twice as much so they start saying that we're using it for this that and the other thing and they're getting

You know, reimbursed at twice the rate and using it for like these crazy programs that have nothing to do with healthcare. And the networks are not as strong as the networks in the ACA. You don't have that level of participation. And so if we could add more individuals to the current marketplace. ACA marketplace. ACA marketplace. 75 million people in small group and middle market employers.

20 million, 21 million gig workers in the economy. If you can put those people into that pool, it gets larger and it gets more stable. Why do you have to go to the House Ways and Means Committee to get this? Why can't you just go employer by employer and say, come to us and do this? Because there are certain, you lose tax subsidies as an employer when you do the defined contribution.

So part of what we put in that bill was we, or that conversation was let's make it possible. Secondly, there were restrictions back in the beginning because the original, the Obama administration was concerned that if they allowed small businesses to put employees in there, they would put the sick employees in

and leave the healthy employees out, and as a result, the network, the risk pool would get worse. And that hasn't happened. - Didn't the ACA expand Medicaid by extending eligibility to nearly every adult under the age of 65? - So in...

along with the ACA legislation. Okay, so that's a fine point. You're saying it's not part of the ACA. It's not part of the ACA. Right, but they expanded it, and that's why we're in this mess right now. And Joe, the states that didn't take it, like Texas...

Eventually took it. No, they didn't take the expanded Medicaid. And they've created their own state-based exchanges for the individual business. Georgia now has an exchange. Texas is building an exchange. Indiana. So red states are now saying, I get this. Get everybody into an individual market where they can buy the product they want at a price they can afford, have money left over for employees that have come out of defying contribution so they're not borrowing money to pay their debts.

One of the statistics you told me really surprised me. The idea, I think if you said it's 15 employees or less, if one woman goes out on maternity leave, it can raise the cost for the entire business's health care costs by double digits the following year. 10%. How much? 10%. 10%. On average.

For one pregnancy in a group. For a healthy. Right, a healthy event, a good event, and it raises it by 10%. Because what happens is the experience of the group goes up, and you have to spread it over 15 people. So if you're talking very small businesses, that's where you really get into issues with some of these things, too. Yeah, so it's a killer.

We've been talking all morning about how Congress can't even determine continuing funding the government over the weekend. What kind of response have you gotten from House Ways and Means? What expectations do you have from Washington on this issue?

Well, the good news and the bad news is that we have grace periods and if the government stops funding the subsidies for individuals, there will still be time for us to catch up on that. I don't think that will happen. 63% of all the people in the exchange now are from red states.

because they didn't get Medicaid expansion. So when you look at the polling for the Republicans, 80% of voting Republicans want to keep the enhanced subsidies. A family of four making $54,000 can't afford to lose their subsidy and their health care coverage. And we cut in half the uninsured in America. We now only have 7% in America that are uninsured. Can I ask a terrible question? And I feel like I'm going to just get killed for asking this question. Do you think that...

the American public is asking for too many services, which is to say that the things that they want and they keep getting added to these programs, which should be better for them. I mean, yes, they are better for people. I don't want to dismiss that. But that some of them are either so marginal or the distinction is so little that we shouldn't actually be

making certain things available to people. I know that's why people go crazy. Do you mean like psychological services, things like... I'm saying certain types of drugs, certain types of services. At 95, getting some really expensive... Oh, look, there's the absolute... It extends it by six months. Yes, there's the end of life is the biggest component. 60% of all costs.

is the biggest component. - But you're talking about around the edges. - I'm saying just around the edges. How much of what is now on offer is too much? And it's like almost politically unpalatable to say aloud. - Nothing at UnitedHealthcare. - I'll share a conversation between our medical director and a physician who asked for something for someone who was dying. And we said, why are we doing this?

Now, in most... What was the something? Pardon? What was the something they were asking for? They wanted to do an additional procedure. When the person was clearly not going to make it. And the doctor's response was, when I walk into the room and the family looks at me, they ask me what we can do next.

and I feel I need to give them something. None of us are going to make it, Mark. Right. Nobody gets out alive. Nobody gets out alive. That's your expression. So this idea of having honest conversations about what's

What's appropriate? I will tell you, as somebody who's been on the receiving end of some of those conversations with family members, it's so emotionally fraught. It is. And there are cases where people come back. Yes, there are. My son. Yeah. He came out of hospice. Yeah. And it's... So what we need to do is we need to make, for end of life, we need to make hospice available without condition.

Today when you go into hospice under Medicare, you have to stop getting curative services and you have to admit you're going to die. You have to in essence sign an NDR. - Yeah. - And so,

If we could have it where people could go into hospice without having to do those things, and we did that at Aetna, and we saw an increase from 20% of people going to hospice to 80% of people going into hospice, and the letters we got from families about how end-of-life happened were so compelling, and it was actually cheaper.

Nobody was grasping for something at the very end, but you allow them the hope of being able to get it if it should occur. And that means everything. That means everything. It does. But having to say you give up is a horrible thing. It's a horrible, horrible process. So we have a market in front of us that can work for all Americans if we can get the legislation right and the policies right to allow employers to do the work.

And it's a marketplace where nobody gets penalized for being sick because the rates are set across the whole market and Americans can choose what they want. I have one final question, which I totally forgot about. Mark Rowan has this idea. I don't know if you've seen it, that if you could take all of the illegal immigrants in America.

turn them into legal immigrants and force them to buy insurance. No, no. - And then you're inservitude? - Well, that the program would be, you can become a legal immigrant or you can become legal, but we're all getting insurance. That because you'd add 13 to 15 million people to the insurance rolls, and because they're younger,

You'd bring the price down materially. This is part of the Wharton budget that he's been advocating for. Does that make sense to you as somebody who's in the business? Let me offer a few points. First of all, there are a lot of immigrants in the ACA today.

And that's part of what happened this week when they passed. - Legal or illegal? - Both. - Okay. - All right? And so, that's part of what they passed on making sure people were legally in the ACA, number one. Number two, the patterns of people coming from South America and Mexico are fundamentally different, particularly if they've never had healthcare or if they've had healthcare in their countries. When I ran South America for Cigna,

People used to line up around the hospital to get what is called a reimbursal, a ticket, so they could go and get healthcare. So where do they line up here when they come? At the hospital. And they end up in the emergency room, and it's highly costly. So we have to have programs specifically designed, and that's what Ola Oskar is about. Call us first, and we'll help you get access to the system.

Mark, I always love having you here because you understand the system like few others. I don't agree with you on everything. I'm a little scared about the idea of giving up employer health care that I've had my whole life, but I appreciate everything you bring to us and what you teach us along the way. So please come back again. Yes. Were you scared when you went to a 401k?

No, because I've never had a pension. I was too late for the pensions. But yeah, and the fear factor that comes with all of that, it's change. I get it. I understand what you're telling us and I appreciate the facts. Yeah, thanks. None of us are going to get out of here alive. Thanks, Mark.

That's the pod for today. Thank you for being here. We appreciate you listeners. Squawk Box is hosted by Joe Kernan, Becky Quick, and Andrew Ross Sorkin. Please tune in weekday mornings on CNBC at 6 Eastern or get the smartest takes and analysis from our TV show right into your ears when you follow Squawk Pod wherever you get your podcasts. We'll meet you right back here tomorrow. All right, clear. Thanks, guys.

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