BCT Editorial – 4/28/10

Below is a detailed critique of the subject editorial.

“Americans actually like many aspects of health-care changes

“Many Americans like the health-care bill that was recently signed into law by President Barack Obama.”

[RWC] As you may remember, after years of claiming it favored “a market-based approach to health-care reform going back to the Clinton era,” in practice the Times threw its support behind Obamacare, the exact opposite.

“They just don’t know they do.”

[RWC] As you will see below, the editorial conflates a person liking a specific provision of the bill with liking the bill as a whole.  In many cases, no matter how bad a bill is overall, it may contain a few reasonable provisions.  Further, if you look at the poll details, you find the provisions listed below were not explained to participants.

“In its first survey since the passage of health-care reform, the Kaiser Health Tracking Poll found that 46 percent viewed it favorably, 40 percent unfavorably and 14 percent undecided.”

[RWC] The editorial failed to note the poll also found “31 percent of Americans say they expect personally to be better off because of the law, while 32 percent say they will be worse off and 30 percent say they don’t expect to be affected.”  In other words, a plurality believes they will be worse off and clear majority believes they will be worse off or no better off.

“But when asked about 11 specific provisions of the legislation that will take effect this year, a majority - a majority, not a plurality - viewed them positively.

[RWC] Most of the following points are covered in my paper entitled “Healthcare.”  Here’s a link to the details of the poll.

“To heap irony on irony, the tracking poll found the support was often bipartisan.

“The 11 provisions and their total favorable ratings (with very favorable in parenthesis [sic]) were:”

[RWC] As you read the following, ask yourself which issue was not addressed in the poll and not mentioned in the editorial.

“- Provide tax credits to small businesses that offer coverage to their employees, 86 percent (48 percent).”

[RWC] Employer-based healthcare insurance already gets special tax treatment and it’s a big part of the current problem.  Providing tax credits is doubling down on an already failed policy.

“- Require that all new health-care plans provide coverage for basic preventive health-care services without charging a co-payment, 82 percent (56 percent).”

[RWC] This sounds nice, but it drives up premiums.  How much more do you think you’d have to pay for auto insurance if your policy were required to cover 3,000 mile checkups, oil & filter changes, air filter changes, annual state inspections, front-end alignments, et cetera?

“- Make it harder for insurance companies to drop coverage when an individual has a major health problem, 81 percent (60 percent).”

[RWC] I’m not sure what this means.  Insurance policies are contracts and law requires both customers and insurers to abide by the terms of those contracts.

“- Provide a $250 rebate to Medicare recipients who have hit the ‘doughnut hole,’ 78 percent (48 percent).”

[RWC] This has to be a joke.  Anyone who has personal experience with the “doughnut hole” knows “a $250 rebate” for a year is nothing.  Don’t get me wrong; I think Medicare Part D is wrong, period.  My point is this is one of those things that can sound good to some people, but only if they don’t understand the context.

“- Create a high-risk pool in the short term for those unable to get coverage because of pre-existing conditions, 75 percent (43 percent).”

[RWC] The actual poll statement was “Create an insurance option, or high-risk pool, for those people whose pre-existing health conditions currently make it difficult for them to find and buy affordable health insurance.”  It sounds nice, but there are two major problems here.

First, if a person has a pre-existing condition, his health condition is not high-risk, it is a certainty.  The risk is not whether the insurer will ever have to pay, but how much.  A true high-risk would be an otherwise healthy person working in an unhealthy environment.  Coalminers may be an example.

Second, if you buy into the high-risk spin, what good would it do?  After all, the “high-risk pool” would be composed of high-risk and pre-existing condition customers.  By necessity a pool like this would require high premiums.

“- Allow children to stay on their parents’ insurance plans until age 26, 74 percent (47 percent).”

[RWC] Other than for children with sufficient mental or physical challenges (in which case there probably shouldn’t be an age limit), why?  Children attending medical school could be another exception since a medical student could easily be 26 before he graduates.  In any case, this should be something determined by the customer and insurer.

“- Prohibit insurance companies from denying coverage to children with pre-existing conditions, 71 percent (52 percent).”

[RWC] Insurance coverage for pre-existing conditions isn’t insurance, it’s a handout.  It’s like buying fire insurance for your house after it catches fire and expecting the insurance company to pay your claim.  Again, this drives up premiums for everyone.  I feel for families in this position, but we don’t need Obamacare to address it.

“- Require insurance companies that are spending too little on health care vs. administrative costs and profits to provide rebates to customers, 68 percent (37 percent).”

[RWC] Who’s to determine what is too much or too little?  The primary effect of this would be a disincentive to provide a better overall product because you’d have to give away the fruits of your work.  That is, if I think I can do something both better and cheaper than current practice, why would I take the financial risk if the benefit isn’t commensurate with the risk?

“- Prohibit insurance companies from setting lifetime limits on coverage, 67 percent (39 percent).”

[RWC] Yet another provision that by necessity will drive up premiums.  Other than the federal government, which can print money to cover its obligations, no insurer can provide limitless coverage without charging higher premiums to make sure it has the funds on hand to pay limitless benefits.

“- Begin reviews of health plan premium increases and require plans to justify those increases, 65 percent (33 percent).”

[RWC] The actual poll statement was “Beginning federal reviews of health plan premium increases and requiring plans to justify those increases.”  This already happens at the state level, so we’re talking about another layer of government bureaucracy and/or a federal power grab from the states.

“- Limit future increases in Medicare payments to certain types of health providers, 57 percent (23 percent).”

[RWC] The actual poll statement was “Limiting future increases in Medicare payments to health care providers such as hospitals and home health agencies as a way to help pay for health reform.” This is an attempt at price controls and they never work.  I wonder why the editorial left out the “such as hospitals and home health agencies as a way to help pay for health reform” part. <g>  As a reminder, Obamacare takes $500 billion out of Medicare over 10 years.  It’s $750 billion if Congress doesn’t pass the annual “doctor fix” to make up for Medicare’s normal underpayment of doctors.

“Here’s one other aspect of health-care debate the survey turned up.

“Despite all the rhetoric and supposed anger over the bills [sic] passage, 69 percent said they weren’t angry.  In this case, they are the true silent majority.”

[RWC] Did you note the one question not asked?  Not once did the statements introduce the context of cost.  How would the responses have changed had the poll attached cost estimates to the provisions?  That is, if you liked provision x with no mention of cost, would you still like provision x if it raised your premiums and/or taxes by $y/year?