The worst part is, they’re not entirely wrong. And that same system will now be controlling your health care and an ever-growing share of your income.
The worst part is, they’re not entirely wrong. And that same system will now be controlling your health care and an ever-growing share of your income.
You know things aren’t going well in Massachusetts when supporters of RomneyCare write “there’s some evidence that the reforms signed into law by Mitt Romney in 2006 are struggling.” That’s how The Washington Post’s Ezra Klein puts it in a post defending RomneyCare. The New Republic’s Jonathan Cohn offers a similar defense.
Klein mentions only a few of the difficulties confronting Massachusetts. Here are a few more:
Nevertheless, the Klein/Cohn thesis is basically that costs have been climbing and employers have been dropping/curtailing health benefits for decades. So you can’t blame that stuff on RomneyCare. We should instead be thankful that Massachusetts enacted a new raft of government price controls, mandates, and subsidies to protect residents from those features of “the American health-care system.”
The only problem is that “the American health-care system” is the product of the old raft of government price & exchange controls, mandates, and subsidies. The largest purchaser of medical care in the country (and the world) is Medicare. Medicaid is second. The Left complains so much about fee-for-service medicine fueling rising health care costs and reducing quality, you’d never know that their beloved Medicare program is the primary reason for its dominance. Likewise, the reason why employers are dropping and curtailing coverage is that the government turned the private health insurance market into an unsustainable employment-based system that is doomed to unravel. Cohn’s book documents the inhumanity of that system so well, you’d think it would sour him on the sort of centralized planning that created it. I could go on…
RomneyCare and its progeny ObamaCare are attempts by the Left’s central planners to clean up their own mess. If Klein and Cohn want to defend those laws, pointing to the damage already caused by their economic policies won’t do the trick. They need to explain why government price & exchange controls, mandates, and subsidies will produce something other than what they have always produced.
A major problem with America’s health care system, both before and after Obamacare, is the fact that consumers very rarely spend their own money when obtaining health care. Known as third-party payer, this problem exists in part because government directly finances almost 50 percent of health care expenditures. But even a majority of supposedly private health care spending is financed by employer-provided policies that are heavily distorted by a preference in the tax code that encourages insurance payments even for routine expenses. According to government data, only 12 percent of health care costs are financed directly by consumers. And since consumers almost always are buying health care with somebody else’s money, it should come as no surprise that this system results in rising costs and inefficiency. This is why repealing Obamacare is just the first step that is needed if policymakers genuinely want to restore a free market health care system (all of which is explained in this 4-minute video).
Unfortunately, many people think that market forces don’t work in the health care system and that costs will always rise faster than prices for other goods and services. There are a few examples showing that this is not true, and proponents of liberalization usually cite cosmetic surgery and laser-eye surgery as examples of treatments that generally are financed by out-of-pocket payments. Not surprisingly, prices for these treatments have been quite stable – particularly when increases in quality are added to the equation.
I just ran across another example, and this one could be important since it may resonate with those who normally are very suspicious of free markets. As the chart from the Alan Guttmacher Institute shows, the price of an abortion has been remarkably stable over the past 20-plus years. Let’s connect the dots to make everything clear. Abortions generally are financed by out-of-pocket payments. People therefore have an incentive to shop carefully and get good value since they are spending their own money. And because market forces are allowed, the cost of abortions is stable. The logical conclusion to draw from this, of course, is that allowing market forces for other medical services will generate the same positive results in terms of cost and efficiency.
None of this analysis, by the way, implies that abortion is good or bad, or that it should be legal or illegal. The only lesson to be learned is that market forces control costs and promote efficiency and that more government spending and intervention exacerbate the third-party payer crisis.
The Century Foundation’s Maggie Mahar is one of the Left’s more knowledgeable and insightful health policy wonks. Today, she blogs about my colleague Michael Tanner’s claim – made in his recent white paper, “Bad Medicine: A Guide to the Real Costs and Consequences of the New Health Care Law” – that ObamaCare, which became law in March, “remains deeply unpopular. Recent polls show substantial majorities support repealing it.” To support that claim, Tanner cites a May poll showing support for repeal at 63 percent.
Mahar says Tanner is “cherry picking”:
Bad Medicine was released July 12. Why didn’t Tanner include June numbers? Instead, he hand-picked the one poll, over a seventeen week span, that shows support for repeal running as high as 63 percent…Indeed, the May 22 poll turned out to be a “bounce”—merely a blip on the screen. Over the next five weeks, the number of respondents who favored repeal fell, while opposition to killing the bill rose.
I’m not sure why Tanner didn’t include more recent numbers, but it may have been because it often takes 6 weeks for a paper to emerge from Cato’s publishing process.
More important, while Mahar is correct that the 63-percent figure is so far the high water mark for repeal, it was hardly “merely a blip.” She herself reports that support for repeal was 60 percent in the very next Rasmussen poll. Nor is it quite accurate to say that support for repeal fell over the next five weeks. Support for repeal reached 60 percent again on July 1, and at no point does Rasmussen show support for repeal falling below 52 percent. In fact, Rasmussen today reports that support for repeal climbed three points to 56 percent in its July 16-17 poll, while opposition to repeal fell by four points to 38 percent. It would be more accurate to say that Rasmussen finds opposition to repeal hovering between 32-42 percent, and support for repeal hovering between 52-63 percent, with no clear trend on either side. But Rasmussen does find far greater intensity on the pro-repeal side: in the July 16-17 poll, 47 percent “strongly favor” repeal, while only 25 percent are “strongly opposed.”
Mahar then selects her own polls to support the Left’s theme that the more Americans learn about ObamaCare, the more they like it. But when we take all available polls into account (as I did earlier today using Pollster.com), we see that opposition to ObamaCare still leads support and the trendline is not moving in the direction Mahar says it is. When we look only at polls of likely & registered voters, opposition to ObamaCare commands a slight majority and leads support by a consistent 9-point margin.
Tanner may have picked the most dramatic numbers, but he didn’t need to. ObamaCare remains deeply unpopular – in spite of Mahar and major media outlets misleading the public by claiming that the law makes preventive care (and other services) available to patients “free of charge.”
This Sunday’s New York Times had a fascinating story about how the defense of the individual mandate has shifted from the Commerce Clause – even though the law itself is replete with boilerplate about “economic activity” – to Congress’s taxing power. Here’s the first paragraph (h/t Jonathan Adler):
When Congress required most Americans to obtain health insurance or pay a penalty, Democrats denied that they were creating a new tax. But in court, the Obama administration and its allies now defend the requirement as an exercise of the government’s “power to lay and collect taxes.”
This is huge. After months of arguing that cases like Wickard v. Filburn (Congress can regulate the wheat farmers grow for personal consumption) and Gonzales v. Raich (Congress can regulate personal growth of state-allowed medicinal marijuana) justify the requirement that every man, woman, and child buy a health insurance policy, government lawyers (and spokesmen) now say the mandate is just a regulation accompanying a lawful tax (the penalty you pay for not buying insurance). After I spent most of April and May criss-crossing the country debating the constitutionality of Obamacare, it turns out that my opponents were barking up the wrong tree!
But don’t just take it from me. Here’s Georgetown law professor and Cato senior fellow Randy Barnett’s dissection of the Times story and its significance. An excerpt:
Now there are cases that say (1) when Congress does not invoke a specific power for a claim of power, the Supreme Court will look for a basis on which to sustain the measure; (2) when Congress does invoke its Tax power, such a claim is not defeated by showing the measure would be outside its commerce power if enacted as a regulation (though there are some older, never-reversed precedents pointing the other way), and (3) the Courts will not look behind a claim by Congress that a measure is a tax with a revenue raising purpose.
But I have so far seen no case that says (4) when a measure is expressly justified in the statute itself as a regulation of commerce (as the NYT accurately reports), the courts will look look behind that characterization during litigation to ask if it could have been justified as a tax, or (5) when Congress fails to include a penalty among all the “revenue producing” measures in a bill, the Court will nevertheless impute a revenue purpose to the measure.
Now, of course, the Supreme Court can always adopt these two additional doctrines. It could decide that any measure passed and justified expressly as a regulation of commerce is constitutional if it could have been enacted as a tax. But if it upholds this act, it would also have to say that Congress can assert any power it wills over individuals so long as it delegates enforcement of the penalty to the IRS. Put another way since every “fine” collects money, the Tax Power gives Congress unlimited power to fine any activity or, as here, inactivity it wishes! (Do you doubt this will be a major line of questioning in oral argument?)
Well, at least they’re not (yet) relying on Rep. John Conyers’s “Good and Welfare Clause.” (Conyers, remember, is a lawyer and chairman of the House Judiciary Committee).
For a concise legal argument against the use of the taxing power to justify the individual mandate, see Cato’s amicus brief supporting Virginia’s challenge to the health care reform. And for a great resource on all the state lawsuits against the new law, see this new blog/website run by Santa Clara law professor Brad Joondeph.
As of mid-July, it appears the American public still opposes ObamaCare, with the opposition strongest among those most likely to vote.
Judging by the latest data at the poll-aggregating site Pollster.com, a solid plurality of adults continues to oppose ObamaCare (46.8 vs. 40.1 percent):
The trendlines don’t look so good for supporters of the law. (The public isn’t so hot about President Obama’s handling of health care, either.) Yet the above graph includes (polls that include) adults who are neither registered nor likely to vote.
If you want to know how public opinion about ObamaCare will influence the November elections, you’ll want to look at polls of likely voters. Those suggest a majority opposes the law (51.3 vs 42.9 percent):
It’s hard to know what to make of the trendlines, since the last poll of likely voters was in April and Pollster.com’s trend estimates can be skewed if the most recent poll is aberrant.
Polls of registered voters (which include both likely and unlikely registered voters) again show that a majority opposes ObamaCare (50.7 vs. 42.7 percent). Compared to the graph of likely-voter-only polls, the “oppose” trendline appears flatter, while the “support” line appears to have the same slope:
Yet the “support” trend-estimate among registered voters started from a lower base, so that the July point estimate (42.7 percent) is roughly the same as that for likely voters in April (42.9 percent). And the most recent spread between opponents and supporters is roughly the same in the two graphs (8.4 vs. 8.0 percentage points).
Combining polls of likely voters and registered voters produces a higher ratio of likely-to-unlikely voters than looking at just registered voters. It also shows that a majority oppose ObamaCare (50.7 vs. 41.2 percent), with a persistent gap of about 9 percentage points:
(NB: The figures I cite in this post are the figures that appeared on these graphs on July 17. Since these graphs are embedded from Pollster.com, the figures in the graphs will change as as Pollster.com adds new polling data to their graphs.)
The Obama administration announced yesterday its plans for implementing ObamaCare’s mandate that consumers purchase first-dollar coverage for preventive services. The press release reads (emphasis added):
Administration Announces Regulations Requiring New Health Insurance Plans to Provide Free Preventive Care
Of course the administration would emphasize that consumers will pay nothing for these services at the moment of service, and elide the fact that this mandate will increase their health insurance premiums. The administration’s use of the word “free” is what we call spin.
What’s surprising–and more than a little disappointing–is that journalists and headline writers at major media organizations would repeat the administration’s spin, as if the government really is giving away free stuff:
Each use of “free” and “no cost” in these excerpts is false, even within its original context. There’s no such thing as a free lunch. Everything has a cost. No government can change that. Mandating that insurers cover certain services does not magically make them free. Consumers still pay, just in the form of higher health insurance premiums and lower wages.
The Wall Street Journal (in paragraph six), The New York Times (paragraph seven), Reuters (paragraph 16), and the Los Angeles Times (paragraph 19 or so) do mention that consumers will pay for this mandate in the form of higher premiums–but that doesn’t make the untrue stuff true. It just makes the article internally inconsistent. Moreover, the Los Angeles Times incorrectly suggests that the higher premiums would be offset by lower out-of-pocket spending. (The change in premiums will be larger due to moral hazard and administrative costs.) And Reuters mentions higher premiums only vaguely, and as if insurers would bear that cost. Each article also repeats the administration’s spin that spending more on preventive care would reduce health care costs, without mentioning that the Congressional Budget Office and other health care researchers dispute that claim.
Journalists need to be very careful with terms like “free” and “no cost.”
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