- Health Care Is So Expensive Because You Don’t Pay For It Yourself - September 18, 2017
- Can Anyone Tell How Obamacare is Doing? - April 1, 2014
- Zeke Goes Off the Rails - March 31, 2014
During World War I the Wilson administration called Germans “the Huns” to dehumanize them and undermine any allegiance German immigrants might have for their country of origin. Calling the foes “Japs” in World War II made it easier for the Roosevelt Administration to bomb civilian targets and place American citizens of Japanese origin in internment camps. It is notable that in both cases, these were extremely “progressive” administrations.
So, it may not be that surprising that during the current progressive administration the opposition has been dismissed as “racists” and “tea baggers.” Who cares about protecting the rights of racist tea baggers? They are illegitimate. They are not worth paying attention to. They are not your friends and neighbors; they are people to be shunned. Go ahead and audit them. Don’t allow them to organize or get tax exempt status ― their views are beyond the pale ― voicing racist tea bagger ideas is probably a hate crime anyway. So it goes in these days of total political war.
Still, it is jarring when the same approach bleeds into what should be a fairly innocuous discussion of insurance costs.
The California insurance exchange recently announced what its rates are likely to be once it becomes effective next January. It was big news because California is the state with far and away the greatest number of uninsured people. If ObamaCare can work there, it can probably work anywhere. Some people were excited because the rates seemed lower than they expected. Others were skeptical because the rates are still higher than what people with individual coverage currently pay.
Hardly seems like the stuff to launch a war over.
That is, until one of the excited people decided to rip into one of the skeptical people. The New Republic’s Jonathan Cohn went on a tirade because Forbe‘s Avik Roy saw the glass half empty (article here). Cohn accused Roy of being an “irresponsible writer” who made a “bogus argument” that “distorted the debate.” YIKES!
In particular. Cohn writes −
Roy never acknowledged that, even as young and healthy people would have to face higher premiums, older and sicker people would face lower premiums. He said absolutely nothing — not a single word! — about the federal subsidies available to people with incomes below 400 percent of the poverty line…it’s entirely possible (I’d say likely) that, with the subsidies, the majority of people buying on the exchange next year will pay less than they pay for insurance today.
I’ll respond to that in a bit, but first some guy named Steve Benen raised the stakes on, of all places, Rachel Maddow’s blog. Apparently Mr. Benen considers himself quite a “policy wonk” because he informs us that in the world of policy wonks Avik Roy is thought to be “a pretty serious guy.” (As far as I can tell Benen himself hasn’t done much more than write blogs and appear on MSNBC from time to time. I guess that qualifies for Wonkdom in the Progressive World). In any case, he writes –
While most of us saw the news from the Golden State as excellent news and proof that “ObamaCare” implementation is proceeding apace, Roy published a remarkably dishonest piece arguing the opposite, deliberately omitting relevant details.
So Roy is “dishonest” because he disagrees with “most of us.” But he goes on –
I believe this is yet another data point that highlights the wonk gap. As Republicans become a post-policy party, even their wonks — their sharpest and most knowledgeable minds ― are producing shoddy work that crumbles quickly under mild scrutiny.
He concludes –
I write often about the asymmetry in American politics, and the consequences of a radicalized party in a two-party system. But this wonk gap points to something related but different: it’s not just Republicans who’ve become more extreme and less interested in substance; it’s also conservatives who’ve allowed their intellectual infrastructure to atrophy and collapse.
Credible policy debates are rendered impossible, not because of the chasm between the two sides, but because only one side places a value on facts, evidence, and reason.
So what’s going on here?
Well, first, the level of hysteria suggests that the progressives are not all that confident that their hopes will come true, so they are lashing out at those who point out that the emperor has no clothes. As I’ve written about repeatedly here, everything ObamaCare has tried to do to date has already failed (except for the mandates on insurance companies to cover preventive care and remove dollar limits on coverage). Everything the government itself has been responsible for (the federal risk pools, the subsidies for retiree health programs, the small business tax credit, the “CLASS Act” for LTC coverage, the CO-OPs, etc.) has failed. So, while the exchanges haven’t yet failed (because they are not yet in effect), the prospects are not bright.
In light of that, the Left can’t simply make a civil argument that they are right and the conservatives are wrong. Since they have no victories to point to, they have to resort to the old progressive tactic of dehumanizing and delegitimizing the other side — conservatives aren’t just mistaken, they are irresponsible, stupid, lying, distorters. Not even worth talking to. Pay no attention to what they say.
More importantly, the question of whether people who are currently insured will pay more or pay less misses the essential issue. Any change in rating and underwriting rules will advantage some people and disadvantage others. But the purpose of ObamaCare was not to tinker around the edges of the currently covered, it was to extend coverage to people who are uninsured!
The real issue is whether what California is offering will appeal to people who don’t currently buy insurance. Here we have a problem. As Philip Klein reminds us, “a young American who chooses to go uninsured under the current system pays $0 per month in premiums.” So even with a subsidy the vast majority of young adults will have to pay more, sometimes a whole lot more than they did before. Klein also points out –
The success of ObamaCare hinges completely on the young and healthy. The reason is that the dream of a system in which sicker individuals can obtain coverage at affordable rates is predicated on the idea that the government can corral a lot more young and healthy individuals into the insurance market to offset costs. As long as insurers are raking in profits by collecting premiums from individuals with virtually no medical costs, they can afford to take on more expensive patients.
Lowering premiums for the currently insured older or sicker Californians does absolutely nothing to grow the population with insurance.
Now, I hate to upset Steve Benen by going all wonkish on him, but it might help to review some data from the most recent EBRI report on the uninsured.
First, as mentioned above, California has far and away the greatest number of uninsured of any state — 7.1 million. Texas is next at 6.1 million, then Florida at only 3.6 million.
The uninsured are overwhelmingly young adult men. 31% of those men between the ages of 21 and 24, and 32.1% of those between 25 and 34 are uninsured (compared to only 14.1% of men between 55 and 64). For women it is 26.4% (age 21 to 24), 24.5% (age 25 to 34), and 15% (age 55 to 64).
They are also in very good health. 59.3% of the uninsured report themselves to be in “excellent” (27%) or “very good” (32.3%) health. Another 29.9% report themselves to be in only “good” health. A mere 2.5% say they are in “poor health” and 8.4% are in “fair health.”
Since they are so healthy they can easily get coverage already, and pay a lot less for it than what California’s exchange is charging (Avik Roy goes into great detail on this here). They also don’t feel much need for comprehensive health coverage since they rarely get sick.
The subsidies don’t provide much help, either. Megan McArdle at the Daily Beast did a pretty thorough review of the subsidies, and found –
So I got a sort of a shock today when I started playing with the Kaiser Family Foundation’s subsidy calculator. I had it at the back of my mind that a single young freelance writer living in California, Washington, or New York, and making $32,000 a year, would qualify for insurance at a basically nominal cost. (The profession doesn’t matter so much, but for obvious reasons, this is a type that I’m particularly familiar with.) It turns out that this person will qualify for a subsidy of about $213 a year, based on an expected “Silver Plan” (the medium coverage package) cost of $3,018, or about $235 a month.
$213 a year for a $3,018 policy!? Obviously if you make less you will get a bigger subsidy and if you make more you will get a smaller subsidy, but the argument from ObamaCare enthusiasts is “don’t worry, people will be subsidized!” That isn’t much comfort to people who are paying $0 today and will have to pay $2,805 tomorrow.
Of course to qualify for that subsidy, people will have to fill out a lot of paperwork disclosing every source of income under penalty of perjury. Is $213 a year worth the effort?
Everyone, even conservatives, accept the existence of a penalty. Progressives think people will pay the premium to avoid the penalty, while conservatives think people will pay the penalty to avoid the premium. Neither is true. There is no penalty unless you ask your employer to withhold more money than you are likely to owe. If you have no refund coming to you, there is no penalty.
Bottom line — no matter how big a tantrum the progressives throw, no matter how many names they call their opponents, no matter how badly they distort the facts, the probability of very many young healthy people signing up for coverage in California or anywhere else is extremely low.
Obviously we won’t know for sure until the program actually kicks in, but I wonder what odds I could get in Las Vegas.
There have been tons of articles written about all this, including –
Ezra Klein in the Washington Post.
Trudy Lieberman in the Columbia Journalism Review.
Anna Gorman in the Los Angeles Times.
Josh Barro in Business Insider.
W.W. Houston in The Economist.
Tami Luhby in CNNMoney.
[First Published by the National Center for Policy Analysis]