No, the HELP Bill Won’t Force You to Lose Your Health Insurance
Ted Kennedy and Jeff Bingaman (HELP Committee photo)
The hot public opinion research on health reform indicates that one of the best ways to frighten people about health reform legislation is to convince them that it will force them to lose the insurance they already have. That’s why Barack Obama always goes out of his way to point out that that’s not the case under any of the major legislative proposals under consideration. And that’s also why Cato’s Michael Tanner is trying to imply that Obama’s lying:
During his speech yesterday to the American Medical Association in Chicago, President Obama said not once, but twice that if you have health insurance today and like it, you will be able to keep it under his reform. Shortly afterwards, the congressional budget Office released its initial scoring of the health care bill drafted by Sen. Edward Kennedy (D-MA) and the Senate Committee on Health Education Labor and Pensions (HELP), concluding that it would result in roughly 23 million people losing the insurance they currently have. Oops!
Only the CBO doesn’t say that and there’s no contradiction here. What the CBO does say is that under the HELP proposal several million people who would have had insurance under the business as usual scenario would have different insurance under the HELP scenario. For example, they estimate that there are about 10 million people who under either scenario would be eligible for employer-provided health care but who under the HELP scenario would be able to get cheaper coverage through an insurance exchange and would elect to do so.
But these aren’t 10 million people “losing the insurance they currently have” these are 10 million people getting a better option and choosing it. And note that the CBO is merely assuming that they would find the new option to be superior. If you preferred to stick with the status quo, nobody would stop you. Obama didn’t promise that everyone would in fact prefer the insurance they have now to the insurance health reform would make available. What he promised was that if you want to keep the insurance you have now, you’ll be able to. Broadly speaking*, the HELP bill meets that goal.
The bill would, of course, apply to the future. And the CBO is talking about how things will be in 2017 or 2019. And there’s really no guarantee that any individual will have the exact same private sector options available to them 10 years in the future. You might change jobs, your company might go out of business, insurance companies might change their offerings, etc. You can’t literally ensure that nothing will change, but the legislative goal is to ensure that the legislation doesn’t force the currently insured to change and it meets that goal.
13 Responses to “No, the HELP Bill Won’t Force You to Lose Your Health Insurance”
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June 16th, 2009 at 11:45 am
But Matt, this is exactly the same sort of blatantly dishonest shit that has been the Cato Institute’s stock in trade since before you were born. They assume their conclusions, cherry-pick, distort, and make shit up.
The question is why so many people seem surprised every single time that this happens, and why people all over the political spectrum inexplicably continue to take their reports seriously.
June 16th, 2009 at 11:47 am
I guarantee this will work it’s way through the media until somebody like Nathan or 420dotcom pops up telling us liberals how stupid we are to believe Obama because it has been proven that he’s lying. It will become unassailable fact. Such is the way American media works and how 47 million people end up voting for a jackass like McCain.
June 16th, 2009 at 11:54 am
As I understand it, the main conservative critique surrounding the public option is that it will be so cheap relative to private insurers that employers en masse will dump their health plans and switch, which would amount to people losing their current coverage (which they may or may not be satisfied with).
To me, that’s a feature, not a bug. But conservatives are looking out for that small slice of the public — I am thinking upper middle-class — whose employers currently provide more extravagant, more expensive health coverage than the eventual public plan will provide. These people might be dropped and forced to sign on to a new, cheaper plan while receiving the same wages. Is this correct?
June 16th, 2009 at 11:58 am
The proponents of the Massachusetts reforms also promised that those reforms would reduce health care costs. Supporters suggested that the reforms would reduce the price of individual insurance policies by 25–40 percent. In reality, insurance premiums rose by 7.4 percent in 2007, 8–12 percent in 2008, and are expected to rise 9 percent this year. By comparison, nationwide insurance costs rose by 6.1 percent in 2007, just 4.7 percent in 2008, and are projected to increase 6.4 percent this year. On average, health insurance costs $16,897 for a family of four in Massachusetts, compared to $12,700 nationally.
June 16th, 2009 at 11:58 am
When the Massachusetts reforms first became law, they were projected to cost about $1.56 billion per year in total, with the largest component, the Commonwealth Care subsidies, costing roughly $725 million per year. As it turns out, those estimates were not even close. By mid 2008, the state was projecting that Commonwealth Care would cost $869 million for FY 2009, nearly a 20 percent increase, and more than $880 million in 2010. However the state secretary of administration and finance says that she expects actual costs to be far higher—perhaps even as much as $100 million higher. The entire reform plan was projected to cost more than $1.9 billion in 2009, some $300 million above projections. State government spending on all health care programs has increased by 42 percent ($595 million) since 2006. With the health care program expected to contribute as much as one-third of the state’s expected $1.3 billion budget deficit in 2008…
June 16th, 2009 at 12:00 pm
The inevitable result of an increased demand chasing a finite supply (in the absence of any form of price rationing) has always been shortages. The impact has been small so far. In 2007, 4.8 percent of state residents reported forgoing care because they could not find a doctor or get an appointment, an increase of 1.3 percentage points since the legislation was signed. For low-income residents, the problem was slightly worse: 6.9 percent couldn’t find a doctor or get an appointment—a 2.7 percentage point hike since 2006. Waiting times were a somewhat bigger problem, with the wait for seeing an internist, for example, increasing from 33 days to 52 days during the program’s first year.
The state may even resort to explicit rationing. In 2008, the legislature established a special commission to investigate the health payment system in a search for ways to control costs. In March 2009, the commission released a list of options that it was considering, including “exclud[ing] coverage of services of low priority/low value” under insurance plans offered through Commonwealth Care.
June 16th, 2009 at 12:04 pm
I
Which is a bad thing — until Anthem/Wellpoint or Aetna does it. They usually do not release a list first, too.
June 16th, 2009 at 12:27 pm
Let’s analyze Matt’s logic using the analogy of a Ponzi Scheme.
1. Stipulate we have an objectively evil person. Pure evil. We know this beforehand.
2. He offers investors a chance to invest in his Ponzi Scheme. Because this is unsustainable, this is just another proof of his evilness.
3. Those investors forgo other potentially worthwhile investments, and invest in said scheme. To them, this looks a rational choice. Mr. Evil Guy laughs, because that’s not his intention at all.
4. The plan collapses after a government investigation. Luckily, it didn’t continue too long, most people get some of their money back. But there is a net social loss as a result of money going into a stagnant pool, instead of those alternative socially beneficial investments.
Now, does the nature of the Ponzi Scheme change if Mr. Evil is not so Evil? No, of course not. What if he’s merely ideological, and goes around collecting money desperately trying to invest in perpetual motion machines and cold fusion? There is a still a social loss, even if Mr. Evil Guy’s intentions are good.
Whether or not the health care reform plan is a “better choice” to offer to people, or a Ponzi Scheme, depends solely on whether it is a social investment, or disinvestment, a destruction of wealth. That of course, relies solely upon your leftist worldview. You understand why conservatives, who disagree, would be inclined to call the one designing the plan Mr. Evil Guy.
Now we’re going to write the Massachusetts plan on a national level.
June 16th, 2009 at 12:33 pm
Shorter Cato: If you think health care reform is sustainable, then the government is offering people a “better choice”. If you think the reform is unsustainable, you infer a Ponzi Scheme, and it doesn’t matter if he’s ideological or malicious. But since you think he’s cavalier with the facts, and not merely dumb, and has knowingly sold you a Ponzi Scheme, you infer Mr. Evil Guy is behind it and heaven knows that he would never offer anyone a “better choice”. So you go about warning people not to invest.
June 16th, 2009 at 12:53 pm
“Cato’s Michael Tanner…”
Well, that was the point at which I knew I didn’t have to read any further. Pity they can’t get better health people.
June 16th, 2009 at 12:58 pm
I have to disagree with your reading of the CBO report. The report states: “Once the proposal was fully implemented, about 39 million individuals would obtain coverage through the new insurance exchanges. At the same time, the number of people who had coverage through an employer would decline by about 15 million (or roughly 10 percent), and coverage from other sources would fall by about 8 million, so the net decrease in the number of people uninsured would be about 16 million.” This, to me, means that those 23 million did lose insurance coverage under the HELP plan since the CBO is counting them as “uninsured.”
The Cato Institute statement is, as usual, misleading though. What they don’t mention is that the CBO report doesn’t take into account any kind of enforceable mandates on the individual or employer side or any public plan option. Once these are in place, ideally, employers would have enough incentive to keep their plans, and to make them attractive enough to keep people in them, that you can keep the insurance that you like. The plan the CBO scored is no where near the final plan from HELP, even though Republicans don’t seem to understand that.
June 16th, 2009 at 2:08 pm
‘Anonymous’:
That was my first reading, too. But I think the report was just worded awkwardly. Footnote #3 on page 5 states:
Which supports Matt’s argument. The front-page summary was probably just written in a hurry.
June 17th, 2009 at 9:24 am
Hi Ryan 2 @3,
I do not think conservatives worry that the public option will be so cheap because it is run so much more efficiently.
Rather, the fear is that it will be, in one form or another, subsidized by the government/taxpayer and so the playing field between public and private will not be level.
The plan appears somewhat analogous to an internet start-up strategy which envisions giving away a product free, or at a loss, to start with the promise of out-sized profits once market dominance is reached.