Obamacare’s conservative critics sure know how to make themselves look out of touch. From Sarah Palin’s 2009 warning about “death panels” to last week’s headlines that a new CBO report said the Affordable Care Act would kill more than 2 million jobs, the law’s critics keep telling whoppers.
Say this much for the critics, though: At least they’re just bungling the facts.
Facts are easy. You can check facts. What supporters of the law are doing, on the other hand, transcends factual bungling. It’s far more advanced: a warping of reality so debauched it looks like something out of a tale by H.P. Lovecraft.
Christina and Timothy Sandefur offer a perfect example in the latest issue of Regulation magazine. The fine levied for failing to purchase insurance, they note, is a “penalty that’s a tax but doesn’t raise revenue.”
Cast your mind back to those halcyon days of yore, when the law was first being debated. Democrats were keen to insist, as President Obama did in an interview with George Stephanopoulous, that the penalty was “absolutely not a tax increase.” On the other hand, the law’s proponents worried the Supreme Court would not buy the line that Congress had the power to impose the levy under the Commerce Clause. (They were right about that.)
So they came up with the bright idea of calling the penalty an “excise tax on individuals without essential health benefits coverage.” That was pretty sketchy, since an excise tax applies to the purchase of goods, not to individuals who haven’t bought a good. But it worked: In 2012 the Supreme Court’s majority rescued Obamacare by agreeing to call the penalty a tax.
At the same time, the Court also insisted that the penalty was not a tax. This was the only way to get around the Anti-Injunction Act, which generally requires someone to pay a tax before he can challenge the collection of it. Since the mandate penalties originally did not kick in until 2014, that would have prevented the Court from ruling on the law’s merits until much later.
But wait, there’s more!
The Constitution says “all bills for raising revenue” must originate in the House of Representatives. But the ACA originated in the Senate, when Majority Leader Harry Reid took a House-passed measure, deleted its text, and substituted what became the Patient Protection and Affordable Care Act for the original bill.
The Pacific Legal Foundation is challenging the constitutionality of Obamacare on Origination-Clause grounds. In response, the Obama administration claims the ACA not only originated in the House, but also that it is — wait for it! — “not a ‘Bill for raising Revenue.’ ”
So is the penalty a tax or not? Answer: Pick a color between one and 10.
And this is only the beginning. Consider the ACA’s other controversial mandate — the contraception mandate, now being challenged by (among others) Hobby Lobby, a company called Conestoga Woods, and Little Sisters of the Poor, a Catholic charity. They do not want to be forced to provide or arrange for contraception, which violates their religious beliefs.
In response, Obamacare defenders could simply say that life is full of trade-offs, and ensuring access to free contraception is more important than religious liberty. Instead, they want to claim both sides of the argument by insisting that those who object to the mandate are the ones violating religious freedom. Not buying your employees contraception, their argument goes, violates the employees’ freedom of religion. How? Because, um … hey, look, a squirrel!
The other day The New York Times took this absurdity another step further. The paper argued — you might want to grab a chair — that not forcing companies to furnish contraceptives for their employees violates the Establishment Clause of the First Amendment.
Moving on: The Affordable Care Act says people who qualify can obtain subsidies to buy insurance through an exchange “established by the state.” Thirty-four states have no exchange of their own; they have exchanges established by Washington. This means the people of those states are ineligible for subsidies. According to the law’s defenders, though, the language of the law does not say what it says, because we all know what Congress really meant. Or something like that.
Which brings us to last week, and the CBO’s projection that Obamacare will induce more than 2 million people to quit working or cut back their hours to take advantage of the law’s subsidies. Conservatives initially misread this as saying the law would destroy 2 million jobs, which was wrong of them; employers will not lay off 2 million people.
But if conservatives were too quick on the trigger, what excuse do liberals have? Not content to point out the truth, they have tried to spin the news as good: Isn’t it wonderful that those who could work will choose not to so they can reap benefits from the shrinking cohort of the employed? Obamacare is liberating people from the tyranny of gainful employment! What could be better?
Answer: “a comprehensive national health care system and a guaranteed basic income,” according to Alex Pareene of Salon, because “people should be free from [lousy] jobs.” If they were, then they could “spend more time with their families,” enrich themselves, get educated, “and even just … [fool] around a little more.” (No word on who, exactly, will be left to provide the income in this non-worker’s paradise.)
A world in which nobody has to do unpleasant work is a world in which you ride to the park on a unicorn. But that is a world many of Obamacare’s supporters inhabit: a place where the individual mandate is both a tax and not a tax; where the First Amendment’s Establishment Clause requires religious people to violate their faith; where “the state” means “the federal government”; where taking a job is wage slavery, but taking a handout is freedom.
Makes you wonder what color the sun is there, doesn’t it?
Pick a color between one and 10.
Policymakers and anti-addiction advocates now want to suppress opioid use, and to impose even greater restrictions on people who live with chronic pain. This isn’t going to address the addiction and overdose problem. Studies are now showing that when opioids aren’t as available and prices go up, addicts just switch back to street heroin. Pain patients, however, simply suffer. Their plight shouldn’t be an afterthought and shouldn’t be relegated to comments sections to stories that failed to consider their perspective. They are a crucial part of this story.
While contemporary mythology has it otherwise, the market is not a distinct phenomenon: it is what exists when people interact and otherwise voluntarily transact with each other. The broad definition of the market is simply what people (choose to) do when they are not forced to do otherwise. So it is not surprising that even the Soviet Union, “despite” its anti-market rhetoric, fundamentally relied on markets: foreign markets for prices to guide planners’ economic calculation, and domestic black markets for resource allocation and goods distribution according to people’s real needs and preferences. The black market, indeed, was “a major structural feature” of the Soviet economy.
In other words, we should expect to see markets wherever governments fail. Or, to put it more accurately, markets exist where government cannot sufficiently repress or otherwise crowd out voluntary exchange.
So it should be no surprise that, as The Local reports, Swedes en masse get private health care insurance on the side of the failing welfare systems. This is indirectly a result of the relatively vast liberalization of the Swedish economy over the course of the past 20 years (as I have noted here and here), which has resulted in the “experimental” privatization of several hospitals (even one emergency hospital is privately owned). While previously only the political elite (primarily, members of the Riksdag, the Swedish parliament) had access to private health care through insurance, the country now sees a blossoming and healthy insurance market.
Private health care insurance was initially offered to employees as part of employers’ benefits packages, since this ensured direct access to care when needed, and a faster return to work. This trend was easily recognizable in service sectors heavily dependent on the skill and knowledge of individual employees. Working as a professional consultant in Sweden in the late 1990s and 2000s, I personally experienced and benefited from such private health care insurance through my employer. This type of very affordable insurance provided same-day appointment with GPs and specialists alike, whereas going to the public hospital would have entailed waiting in line during the overcrowded “open access” times or waits of perhaps a week or more to see a GP.
My experience is first-hand with both alternatives, and they were at the time as different as night and day. While talking heads in the media cried out that private insurance created a “fast track” for “the rich,” the net effect for the already overwhelmed public health care system was relief through decreased demand. As we should expect from any shift toward market, everybody was ultimately better off thanks to this (limited) marketization of Swedish health care (perhaps excepting bureaucrats who previously enjoyed the power to directly control health care).
Waiting for Care
Swedes maintain that they get good (they mean great) health care, and the statistics partly confirm this. In fact, Sweden’s health care was recently noted as the tenth most efficient in the world (excluding smaller countries). The decentralized regional system of government (regional governments, taxing incomes in the range 10-12 percent, are primarily responsible for health care, public transport, and cultural subsidies) has undoubtedly contributed to this, especially since the national voucher/guarantee system enacted in 1992 has increased competition between regions and thereby placed pressure on politicians and hospital administration.
The fact that one in every ten people voluntarily foregoes care even though they need it, according to the regulating authority Socialstyrelsen’s status report 2011 (3 percent of whom could not afford care, p. 64), should also lessen the pressure on the health care system. It should also be noted that Swedish bureaucracy overall is comparatively effective and efficient (likely a result of the country being very small and having a long tradition of both governmental transparency and a hardworking population), so why would this not also be the case in health care?
The main problem is naturally due to the central planning of health care, whether or not it is planned by regional “competing” governments. While access and quality are guaranteed by national law, Swedes usually have to line up for care. As noted above, wait times may be days or weeks for appointments with GPs while several (or many, and increasing) hours for ER care, but the real problem is apparent in specialist care such as surgery where wait times are not uncommonly several months, or even years.
Swedish media frequently reports on cases of mistreatment, extreme wait times, and deaths due to not being offered care in time. An increasingly common phenomenon is denying the severely ill ambulance for all sorts of symptoms, for example severe burns, blood poisoning, myocardial infarction (1, 2), or stroke.
Even an otherwise laudatory article in The New York Times notes how wait times are the problem in Swedish health care. This remains a major shortcoming despite the national “health care guarantee” (guaranteed care within 90 days). As in any market where consumption is subsidized through artificially low (or no) fees, demand skyrockets and there is simply no way for suppliers of the service to keep up with it.
Private insurance and (semi-)private hospitals in this sense offers relief for an otherwise unsustainable system; their net effect is lower demand on public hospitals, which should make life easier for many in Sweden. Access used to be more difficult, except for those who could skip the regular system by taking advantage of personal relationships or family bonds with physicians, nurses, and other hospital personnel. My personal experience speaks to this latter fact, though it generally is dismissed by Swedes wanting to believe in the system. The fact that “knowing the right people” can open doors is irrefutable, however. And it is important in socialized systems.
A Constant Lack of Funds
As in the NYT article, all problems including the wait times are generally blamed on a “lack” of funds. As Jonsson and Banta note, “limited resources do result in waiting lists and other restrictions.” In the media and political discourse, this is discussed as “cutbacks,” but yet the funds seem to never be enough.
This is symptomatic for any public system — the allocated funds are never (and can never be) sufficient. There is simply too much waste due to lack of incentives and market prices. In order to deal with health care’s runaway costs (or pressure to cut costs, depending on one’s view), health care providers tend to employ the same techniques as others subjected to a public primarily one-payer system. These techniques may vary over time and can be different in different places, but they all amount to exploiting loopholes or in other ways circumvent the system’s limitations. One such technique includes a type of “creative” accounting to up the hospital’s cash inflow by indicating in the patient’s medical records a more expensive treatment than the one actually given. One treatment on the books, another off the books.
This is of course an expected outcome of a centrally planned system with relatively limited health care user fees (contrary to popular myth, Sweden’s health care is not “free”). When Swedes get health care, it is generally of quite good quality. But to get it, they need the right connections, or insurance. The former offers no guarantee but only a relative improvement, while the latter is a proper market contract. No wonder Swedes take advantage of their newfound opportunity to have health care insurance.
The Future: Sweden or the United States?
Liberals tend to point to Sweden as a good example of how well an extensive welfare state functions. They are not completely wrong, since Sweden is a rather well-functioning country. But this is despite the welfare state; these live in the past, and assert that Sweden today is one part in the 1970s and two parts their own imagination. The fact is that the Swedish welfare state imploded in the early 1990s; it was crushed under its own weight after more than two decades of rapid decline.
The reason Sweden is doing so well at present is partly an illusion and partly a market story. It is an illusion since what other countries we have to compare with are also welfare states (or, as in the case of the United States, a warfare-welfare state); being best of the worst does not mean one is actually good. It is a market story since Sweden has for more than two decades consistently rolled back the welfare state, introduced market prices and private ownership, “experimented” with market-like incentives for public providers, and cut taxes.
What Sweden has done is hardly sufficient, but it appears to be in the right direction. More importantly, it is in a direction not taken by many other countries — and this explains the country’s relatively strong financial condition.
In contrast, the United States is moving toward the liberal distorted image of what Sweden is supposedly like. While Sweden is embracing a system including what appears to be real health care insurance, the U.S. is moving from a hybrid third-party payer system (inaccurately described as private health care insurance) to an all-out public health care system following ObamaCare.
When the United States is firmly going down the road to serfdom, the market appears to be taking over Sweden’s health care.
The cloud computing contract for the federal government’s Obamacare exchange came in a lot higher than originally planned, reports NextGov:
The government’s contract with Terremark, Verizon’s cloud division, had already quadrupled from $11 million when it was first awarded in 2011 to $46 million at the time of HealthCare.gov’s disastrous launch in October 2013. That included a $9 million adjustment just days before launch when testing revealed the cloud could only support 10,000 concurrent HealthCare.gov users rather than the expected 50,000.
CMS ordered an additional $15.2 worth of cloud services from Terramark between the launch date, when most users were unable to access key portions of the site, and Nov. 30, when officials declared the site was performing at an acceptable level, according to a justification for other than full and open competition document posted on Thursday.
That contract adjustment paid for added cloud storage plus firewall upgrades, additional software and various other services.
Once again, it suggests that the federal government didn’t know what they were getting into when the exchanges launched last October. Asked about the increased cost, a federal health official tells NextGov that “if the additional services were not added urgently, the exchanges would not function as designed and citizens would continue to have issues using the marketplace.” In other words, the original plan had been for a system that wouldn’t work.
Egads! I can scarcely contain my utter shock and surprise!
While the costs of providing health care insurance are beginning to skyrocket because of Obamacare, insurance company executives are sleeping very soundly. A respected consultant to health insurance companies, Robert Laszewski, reveals that there are two obscure provisions in Obamacare that guarantee that insurance companies will be subsidized and bailed out by Amercian taxpayers. Indeed the Congressional Budget Office estimates that $1.071 trillion will be coercively transferred from taxpayers to big insurance companies over the next decade.
This massive redistribution of wealth will take place via two programs stealthily embedded in the Affordable Health Care Act. The first is the Reinsurance Program under which large claims are capped for insurers offering individual plans under Obamacare. Insurers pay for claims up to $45,000, while the Federal government picks up 80% of the costs exceeding $45,000 up to a maximum of $250,000. This means that Obamacare is a public-private insurance scheme and that we are already half-way to the “single-payer” insurance program that Obama and his left-wing cronies so keenly pine for. Needless to say, neither President Obama nor the establishment media have publicized this provision of Obamacare.
Obama and his media supporters have also scrupulously avoided public references to the Risk Corridor Program that limits total losses for insurance companies via a complex formula. Basically, under this provision, taxpayers would be on the hook for 75%-80% of an insurance company’s losses. The enormous taxpayer-funded subsidization of costs and socialization of losses will make Obamacare more palatable to insurance companies and the public at least for a while, since insurance companies will not need to raise their premiums as much as they would have if they were forced to bear the full burden of cost increases and the risk of huge losses. This may give this destructive program time to take root and wreak havoc with what quality remains in the American health care system. Should Obamacare become permanent, Americans as taxpayers and as consumers of medical services will spend many sleepless nights worrying about how they will pay their tax bills and where they will find quality medical care.
[R]emoving us as the real consumer in health care and putting someone between us and providers-whether it’s insurers, whether it’s Medicare or Medicaid-has completely turned the incentives in the system on their head. What we see now is that the best way to make money in health care is to price high; provide excess service; be sloppy about safety; underinvest in service, which includes information technology; and lack the type of accountability we see in anything else. …
It’s extraordinary how removing the consumer from health care has caused us to buy everything. And because we’ve taken ourselves out, we’ve taken out the major incentive for keeping prices down. Health care should be unbelievably cheap, right? It’s a capital-intensive, almost zero-marginal-cost business. Instead we’ve done everything we can to keep their prices high.
Unfortunately, he later advocates for solutions that run counter to the great insights he offers above. Nevertheless, he rightly understands where the problem lies:
The other day I was at a speech in which a politician said that if we could figure out a way to integrate care, we can reduce the number of MRIs performed, and that will bring costs down. He and I were sitting next to each other afterward, and I said, “That doesn’t bring costs down. The marginal cost of doing MRIs is zero. You already have the machine; you already have the technician. You’re confusing price and cost.”
In health care, we never talk about prices. We like to believe that somehow there’s some force that actually determines what something costs that is independent of economics. That has been devastating to prices in health care.
There was a terrific piece in The New York Times about asthma drugs. Way into the story, toward the back, the reporter did a terrific job at looking at high prices in health care, and she recognized that these are prices, not costs. One thing the asthma drug companies are determined to do is to avoid their drugs ever being sold over the counter. They want them sold on prescription, where the prices are high. …
Preventative care is an example of where the Affordable Care Act confused cost and price and visible cost. Preventative care was developing as a very competitive sector, because under most people’s high-deductible plans they were paying for most of their preventative care. You saw minute clinics growing all over the country-the drug stores in Walmarts and what have you. The reality is that the cost of performing most tests is almost zero. There are a lot of technologies out there that will bring it down close to zero and, more important, let you do it at home. Why? Well, they had a chance to succeed because you were paying for it.
The supporters of the Affordable Care Act think preventative care should be free. The problem with that is all that incentive to price preventative care cheaply went out the window the minute you said anybody who’s insured should never have to pay a penny for preventative care. The incentive to keep prices down was gone.
It’s an interesting example of what’s happened in all of health care. Look at Medicare. In 1965 the average senior spent 10 percent of his or her income on health care and was paying for all of it. Fast forward almost 50 years. The average senior pays only 5 percent of their total health care costs; 95 percent is paid through Medicare. That 5 percent is now almost 20 percent of their income. They’re no better off financially. The extremes are less; fewer people have extreme examples. But all you’ve done is you’ve enabled my disguise, my not knowing what something costs me, my crazy belief that someone else is really paying for it to allow the providers to push up prices.
Only a bioethicist could prefer a world in which we have 1,000 altruists per annum and over 6,500 excess deaths over one in which we have no altruists and no excess deaths.
The Patient Protection and Affordable Care Act (Obamacare) mandates not only that employers provide comprehensive medical insurance to their full-time employees, but also that the coverage include contraceptives — at no cost to employees. Because contraceptives are not found free in nature and insurance companies are for-profit businesses, not charitable foundations, this means that the explicit expense must be borne by employers.
This raises a host of issues. For example, if employers have to pay up front for their employees’ contraceptives, the money will likely be subtracted from some other form of compensation, perhaps other non-cash benefits. So employees will pay after all; they just won’t realize it.
Moreover, the use of contraceptives is not an insurable event because it is a volitional action. Insurance was devised to provide financial protection against unlikely but costly happenings, such as major disease, fire, and storms. It was not supposed to be a way to get other people to pay for the routine things you want to buy.
Coverage for contraceptives is like fire insurance that covers arson committed by the policyholder. It’s the kind of thing that only government can bring into existence — by threatening those who fail to comply. The corruption of language is just one of many offenses here. …
As we know, some employers have a religious objection to contraception and therefore believe that their freedom of conscience is violated by the mandate that compels them to pay for their employees’ birth-control products. (Must I say that the validity of their moral views on contraception is irrelevant as far as justice is concerned?) …
We need to hold the mandate’s advocates responsible for their base rhetoric. It is the government’s decree — not the employers who object to it — that violates religious liberty. Those who favor the mandate say repeatedly that employers who would refuse to pay for their employees’ contraceptives because of religious scruples would be denying women access to contraception.
That is obviously a lie, sheer demagogy. No woman would be prohibited from obtaining contraceptive products because her employer refused to pay. Even if contraception were prohibitively expensive — which it is not — merely abstaining from paying would not constitute denial of access.
People who make such demagogic statements know the difference between denying access and merely choosing not to foot the bill, but they hope we won’t see the distinction. In other words, they insult our intelligence. (The news media are accomplices in this commission of base rhetoric. I’d like to know of one case in which a reporter asked Cecile Richards, president of Planned Parenthood, to defend her equation of the refusal to pay with the violation of the rights women.)
Next the mandate advocates throw up a smokescreen of irrelevancies, such as the benefits and widespread use of contraception. I call this irrelevant not because the claims are false, but because even if true, they do not justify compelling anyone to pay for someone else’s contraception.
That is the only point at issue. On what grounds can the government justly require employers to pay for their employees’ birth control services? There are none.
Finally, proponents of the mandate warn that if religious employers can opt out of paying for contraception, what’s to keep any employer from claiming a conscientious objection to all Obamacare (or other) mandates?
Nothing, I hope. We should welcome it. Religious people who oppose contraception are not the only people with rights against the government. No one should be subjected to government mandates. The only thing any of us can be legitimately required to do is abstain from initiating force and fraud against others. Enforceable decrees that go beyond that simple prohibition violate our rights and have no place in a civil society.
Here’s a total shocker absolutely no one could have ever seen coming…
Supporters of President Obama’s health care law had predicted that expanding insurance coverage for the poor would reduce costly emergency room visits because people would go to primary care doctors instead. But a rigorous new experiment in Oregon has raised questions about that assumption, finding that newly insured people actually went to the emergency room a good deal more often.
The study, published in the journal Science, compared thousands of low-income people in the Portland area who were randomly selected in a 2008 lottery to get Medicaid coverage with people who entered the lottery but remained uninsured. Those who gained coverage made 40 percent more visits to the emergency room than their uninsured counterparts during their first 18 months with insurance.
The pattern was so strong that it held true across most demographic groups, times of day and types of visits, including those for conditions that were treatable in primary care settings.
The findings cast doubt on the hope that expanded insurance coverage will help rein in emergency room costs just as more than two million people are gaining coverage under the Affordable Care Act. And they go against one of the central arguments of the law’s supporters, that extending insurance to large numbers of Americans would reduce emergency room use, and eventually save money.
In remarks in New Mexico in 2009, Mr. Obama said: “I think that it’s very important that we provide coverage for all people because if everybody’s got coverage, then they’re not going to the emergency room for treatment.”
The era of Gesture Liberalism is at hand. It may be more amusing than consequential.
Americans who exercise consumer sovereignty wherever Barack Obama still tolerates it are constantly disappointing him. For generations they persisted in buying what he calls “substandard” policies from what he calls “bad apple” health insurers. They stopped only when he forced them to stop — when he rescued them from their ignorance by banning their benighted preferences.
Have consumers thanked him for trying to wean them from their desire to drive large, useful, comfortable, safe vehicles that he thinks threaten their habitat, Earth? The 2013 numbers tell the tale of their ingratitude. In 2013, for the 32nd consecutive year, the best-selling vehicle was Ford’s F-Series pickups. This supremacy began, fittingly, in the first year of Ronald Reagan’s deregulatory presidency.
Today’s consumers, who cannot get it through their thick heads that they are supposed to want wee vehicles such as Chevrolet’s Volt, bought 763,402 F-Series trucks. That is 740,308 more than the number of Volts General Motors sold.
In 2010, a GM official carefully said “more than 120,000 potential Volt customers have already signaled interest in the car.” Signaled? How? Not by buying. At the 2013 rate of sales, by 2046 GM will have sold as many Volts as Ford sold F-Series trucks this year. Obama, our Nostradamus, prophesied a million electric cars on U.S. roads by 2015. If so, they will have to outsell F-Series trucks this year.
The sort-of-electric Volt — it is a hybrid — probably is one of those great ideas Joe Biden celebrated in 2010: “Every single great idea that has marked the 21st century, the 20th century and the 19th century has required government vision and government incentive.” Government’s incentive for Volt buyers is a tax credit up to $7,500. A 2011 study showed that taxpayer-subsidized Volt or Nissan Leaf buyers had average annual incomes of $150,000, and more than half of them owned at least two other vehicles.
In 2009, the Obama administration disapprovingly said: “GM earns a large share of its profits from high-margin trucks and SUVs, which are vulnerable to a continuing shift in consumer preferences to smaller vehicles.” Continuing? A 2011 Wall Street Journal headline: “Americans Embrace SUVs Again.” A Wall Street Journal subhead last week: “U.S. Sales Cruise Back to 2007 Levels, Driven by Fondness for Pickups, SUVs.”
Building the Volt was bankrupt-and-bailed-out GM’s gesture of obeisance to its Washington masters. And causing the Volt to be built was a gesture by those masters to demonstrate how much they worry about the climate. The climate may not understand the importance of gestures.
Today, Little Sisters of the Poor Home for the Aged v. Sebelius may be the second-most serendipitously named court case in U.S. history, second to Loving v. Virginia (wherein Richard Loving, who was white, and his wife Mildred, who was black, in 1967 overturned Virginia’s law against interracial marriages). The Little Sisters are challenging the Obamacare mandate that makes them complicit in providing, through their health insurance, contraception, something that offends their faith.
This mandate illustrates Gesture Liberalism: It is unimportant to the structure of Obamacare. It has nothing to do with real insurance, which protects against unexpected developments — car insurance does not pay for oil changes. The mandate covers a minor expense: Target sells a month of birth control pills for $9 . The mandate is, however, a gesture affirming liberalism’s belief that any institution of civil society can be properly broken to the saddle of the state.
The next item on Gesture Liberalism’s agenda is to raise the minimum wage for the 23rd time. Less than 3 percent of the workforce earns the minimum; more than 60 percent of those who do earn it get a raise within a year; more than half of minimum-wage earners are students or other part-time workers from households with average incomes of $53,000. Never mind. Raising the minimum is a gesture of devotion to “equality.”
As is Obama’s support for universal preschool, the centerpiece of the agenda of New York City’s new mayor, Bill de Blasio. When, in Obama’s first inaugural address, he vowed to “restore science to its rightful place,” he evidently meant to exclude social science: There is much discouraging data about the efficacy of universal preschool.
It will, however, mean billions for hiring more members of teachers unions, whose dues will help elect the likes of Obama and de Blasio. So this component of Gesture Liberalism is more than just a gesture.
Presented with a devilish grin:
What I’m about to show you is in my opinion an embarrassment to the economics profession and I wish more of my colleagues would express their strong disapproval.
… the facts are striking. Since 2010, when the [the Affordable Care Act] was passed, real health spending per capita — that is, total spending adjusted for overall inflation and population growth — has risen less than a third as rapidly as its long-term average. Real spending per Medicare recipient hasn’t risen at all; real spending per Medicaid beneficiary has actually fallen slightly.
He then goes on to consider a number of possible causes for this slowdown, but appears to give the lion’s share of the credit to ObamaCare. In fact his column is titled, “ObamaCare’s Secret Success.”
All of which is pointless speculation, because as the chart clearly shows, nothing happened to the rate of increase in health care spending in 2010 ― the year ObamaCare was passed.
Yes, the growth rate of health care spending that year was well below the historical average. But it was just as much below it in 2009, the year before the act was passed! Health care spending growth in 2010 was exactly the same as it was in 2009. It remained exactly the same in 2011. And again in 2012. Looking only at the numbers, we would have to conclude that nothing that happened in 2010 had any impact whatsoever on health care spending. Nothing Congress did; nothing the president did; nothing that anyone did that year seems to have mattered.
Here is something else Krugman failed to inform readers about: as the chart clearly shows, the slowdown in the rate of health care inflation has been steady and stretches over almost the entire decade before the Affordable Care Act became law. Whatever the cause, it started early on George Bush’s watch ― not under Barrack Obama.
Moreover, ObamaCare doesn’t really begin until this coming January. All the changes up to now have been cost increasing ― providing risk pool insurance to the uninsurable, forcing private plans to cover more benefits, and adding such extras to Medicare as free “wellness exams.”
So how does Krugman manage to give ObamaCare any credit for a slowdown in spending? He begins by noting that a 2011 letter signed by hundreds of health and labor economists pointed out that “the Affordable Care Act contains essentially every cost-containment provision policy analysts have considered effective in reducing the rate of medical spending.”
Sad to say, but there are members of my profession who will occasionally sign their names to nonsense. Even so, shouldn’t readers be told that the letter and the Congressional testimony of the letter’s organizer, Harvard professor David Cutler, have been completely discredited by University of Chicago professor Casey Mulligan and other reputable economists ― scholars who actually looked at the facts instead of signing on to shoot-from-the-hip rhetoric.
And shouldn’t readers be informed that every reputable forecast made by serious economists has concluded that ObamaCare will add to health care spending, rather than detract from it. For example, the Medicare actuaries predict that ObamaCare will add $625 billion to total health care spending over the next decade. And the RAND Corporation predicts that consumers in the ObamaCare exchanges will pay almost $2,000 more for health insurance than they otherwise would by 2016.
Krugman has other arrows in his quiver. For example, he claims ObamaCare:
- Has cut payments to private Medicare Advantage plans. But most of these were postponed until after the 2012 election and don’t really kick in until next year.
- Has cut some provider payments. So far, these have been minuscule.
- Has begun to penalize hospitals with high readmission rates. But this program was started only recently and so far the savings are scant.
- Has encouraged doctors and hospitals to organize into accountable care organizations, where Medicare payments will be partly based on performance. But the number participating so far is small and there appears to be little evidence of success in reducing in costs or improving in quality.
Further, Krugman must surely know that the federal government has been funding dozens of pilot programs and demonstration projects to see if different methods of payment under Medicare will reduce costs and improve quality. Yet three separate Congressional Budget Office reports have found that these experiments are not working. (See here, here and here.)
There is one final bit of deception. Krugman writes that:
…there’s evidence that Medicare savings “spill over” to the rest of the health care system — that when Medicare manages to slow cost growth, private insurance gets cheaper, too.
Well not quite. The study found that this is true not for Medicare, but for private (Medicare Advantage) plans that Krugman generally rails against for being less efficient than government insurance and that receive fees that ObamaCare is scheduled to cut.
Finally, here is Bob Laszewski making some of these same points at The Health Care Blog.
Okay no this is real and incredibly amazingly awesome. When one of my sister’s friends had a younger brother they diagnosed him almost immediately with an extremely rare chromosomal deletion. So rare that they can’t give a life expectancy, and he’s been in hospice care since he was born. He was having near constant seizures. At age three he can’t sit up, and has only just started to lift his head on his own. He doesn’t register or understand people talking to him, the only thing that can hold his attention is the ceiling fan, he has no control over his limbs, and for a while he couldn’t swallow and had to be fed through a port in his stomach. Pretty much the only thing he could do for himself was roll over, and he didn’t seem to do that except when he got uncomfortable on his back.
At the beginning of December he started in the Charlotte’s Web program. Already it’s making an incredible difference. He’s started rolling with a purpose, going towards things that pique his interest. He’s swallowing again, and they’re planning to take the port out. He’s actually focusing on things, and smiling and laughing at things like toys, not just other people smiling at him. And a few days ago while he and his mom were at his school, he clapped his hands on command.
And people are so fucking scared of this drug that Baby Paul and his family can’t travel outside our state, because by federal law they’d be risking getting his medication confiscated. They’re so concerned about teenagers getting high and it’s Baby Paul, his family, and all the people like them who suffer for it, and that’s just plain wrong.
And today, apparently after only weeks since first using “Charlotte’s Web,” catlock-catwings shares:
Update: Baby Paul is swallowing, sitting up on his own, smiling and saying “Mama”. This is amazing.
Medical Insurance that Worked — Until Government “Fixed” It
Today, we are constantly being told, the United States faces a health care crisis. Medical costs are too high, and health insurance is out of reach of the poor. The cause of this crisis is never made very clear, but the cure is obvious to nearly everybody: Government must step in to solve the problem.
Eighty years ago, Americans were also told that their nation was facing a health care crisis. Then, however, the complaint was that medical costs were too low, and that health insurance was too accessible. But in that era, too, government stepped forward to solve the problem. And boy, did it solve it!
Good read as I’m sitting in a hospital…
In the past (not going to bother digging it up), Krugman has argued that the Republicans who were desperately trying to avert the onset of ObamaCare were belying their own arguments. If they actually thought it would be a disaster, Krugman argued, then they should let it get implemented, because then everyone would see how awful it was, and it would get repealed, much to the chagrin of the Democrats.
I’m not kidding, that’s really what he argued. In case you’re not seeing why that’s so absurd, Krugman unwittingly spells it out when he blogs today:
For almost two months, the debacle of healthcare.gov allowed conservatives to live the life they always wanted. Health reform was a dismal failure; Obama would go down in history as a laughingstock; government can’t do anything; viva Ayn Rand!
Meanwhile, the technicians were working on what was always a technical IT problem, not a problem with the fundamental structure of the law. And while things are far from completely fixed, the crisis is clearly over. Obamacare will have millions of beneficiaries by the time open enrollment ends; it will add many more in the 2015 cycle. Health reform is pretty much irreversible at this point.[Bold added.]
Let me add one final clarification on the above point: No Tea Party partisan ever denied that handing out federal money to millions of people, would create millions of people who supported the government program. That was part of the objection all along, that once this thing started, it would be impossible to turn off, no matter how awful it was.
Next, young progressives who really love ObamaCare and trust Paul Krugman should take pause at this throwaway line:
Apparently, however, many people on the right are still stuck on the notion that Obamacare is doomed, indeed that it’s collapsing as we speak. The latest version is the supposed “death spiral” of young people not signing up.
As Ryan Cooper says, don’t count on it. There are lots of good reasons for the young to sign up, including the fact that it’s the law.[Bold added.]
Incidentally, I can’t remember the last time I heard anybody mention this–certainly none of the people explaining how great ObamaCare is going to be–but let me quote from healthcare.gov to make sure we all realize what’s in store:
The penalty in 2014 is calculated one of 2 ways. You’ll pay whichever of these amounts is higher:
* 1% of your yearly household income. The maximum penalty is the national average yearly premium for a bronze plan.
* $95 per person for the year ($47.50 per child under 18). The maximum penalty per family using this method is $285.
The fee increases every year. In 2015 it’s 2% of income or $325 per person. In 2016 and later years it’s 2.5% of income or $695 per person. After that it is adjusted for inflation.
(Note you are exempt if you are below 133% of the federal poverty line.)
Now why would they have the (minimum) fee at $95 per person in 2014 when it first kicks in, but by 2016 it rises to $695? Is that because something changes in the underlying actuarial tables? Of course not. It’s because they wanted the initial fee to be something extremely modest, so the media could focus on that. If you surveyed Krugman and Yglesias’s readers and asked, “What will the minimum individual mandate penalty be in 2016 for not having health insurance?” what do you think the median response would be?
Also, note that even in 2014, the tax for not having insurance is either $95 or 1% of household income, whichever is higher. So, if you’re a young person out there who currently doesn’t have insurance, unless you make $9,500 or less annually, you’re paying more than $95. (I think it’s technically adjusted gross income, but you get my point.) This whole thing is unbelievably deceptive.
Oh, the government’s official term for this tax is “individual shared responsibility payment.”
But remember everyone, the only reason anybody could possibly oppose this, is hatred of poor sick people.