The Apothecary's Official Response to the State of the Union

Cross-posted from Critical Condition on National Review Online.

Tonight, according to the advance text of his State of the Union speech, the President will address health care policy in two sections. In the first, he addresses Republicans’ efforts to repeal Obamacare:

Now, I’ve heard rumors that a few of you have some concerns about the new health care law. So let me be the first to say that anything can be improved. If you have ideas about how to improve this law by making care better or more affordable, I am eager to work with you. We can start right now by correcting a flaw in the legislation that has placed an unnecessary bookkeeping burden on small businesses.

What I’m not willing to do is go back to the days when insurance companies could deny someone coverage because of a pre-existing condition.  I’m not willing to tell James Howard, a brain cancer patient from Texas, that his treatment might not be covered. I’m not willing to tell Jim Houser, a small business owner from Oregon, that he has to go back to paying $5,000 more to cover his employees.  As we speak, this law is making prescription drugs cheaper for seniors and giving uninsured students a chance to stay on their parents’ coverage. So instead of re-fighting the battles of the last two years, let’s fix what needs fixing and move forward.

PPACA’s infamous 1099 rule, which requires individuals and businesses to fill out a separate IRS form for any vendor they spend more than $600 on in a given year, was one of the fiscal devices the law’s authors used in order to improve its CBO score. Repealing it appears to have garnered bipartisan support. If Republicans intend to offset this tax increase with spending cuts or other tax increases, it is strategically important that those offsets are unrelated to PPACA, so as to improve the CBO score for repealing the law at a later time under reconciliation rules.

As to the President’s policy-via-selective-anecdotes: (1) The incidence of insurers refusing to cover people because they have pre-existing conditions is vanishingly low; (2) Obamacare will drive health costs skyward, placing severe burdens on individuals and small businesses; (3) closing the Medicare prescription drug “donut hole” will increase wasteful Medicare spending, make entitlement reform more difficult, and increase the price of important medicines; (4) forcing all plans to cover “adult children” up to the age of 26 drives the cost of insurance up, making it less affordable for the very people who need it.

Here’s what the President had to say about entitlement reform:

The bipartisan Fiscal Commission I created last year made this crystal clear. I don’t agree with all their proposals, but they made important progress. And their conclusion is that the only way to tackle our deficit is to cut excessive spending wherever we find it – in domestic spending, defense spending, health care spending, and spending through tax breaks and loopholes.

This means further reducing health care costs, including programs like Medicare and Medicaid, which are the single biggest contributor to our long-term deficit.  Health insurance reform will slow these rising costs, which is part of why nonpartisan economists have said that repealing the health care law would add a quarter of a trillion dollars to our deficit. Still, I’m willing to look at other ideas to bring down costs, including one that Republicans suggested last year: medical malpractice reform to rein in frivolous lawsuits.

When it comes to health care, the Fiscal Commission accomplished very little, so the fact that the President finds himself to the left of that body is telling. Furthermore, it’s laughable for him to say that Obamacare will “slow these rising costs,” when the law includes trillions of dollars in new entitlement spending.

The one area where Republicans and the President might be able to make progress is malpractice reform, though given his disinterest in the issue during the Obamacare debate, one can’t be too optimistic.

I’ll put out a new post with comments on Paul Ryan’s response, either later tonight or tomorrow.

UPDATE: Paul Ryan has posted his prepared SOTU response. It paints in broad brush strokes (appropriate in an all-encompassing, but brief, speech):

Then the President and his party made matters even worse, by creating a new open-ended health care entitlement.

What we already know about the President’s health care law is this: Costs are going up, premiums are rising, and millions of people will lose the coverage they currently have. Job creation is being stifled by all of its taxes, penalties, mandates and fees.

Businesses and unions from around the country are asking the Obama Administration for waivers from the mandates. Washington should not be in the business of picking winners and losers. The President mentioned the need for regulatory reform to ease the burden on American businesses. We agree – and we think his health care law would be a great place to start.

Last week, House Republicans voted for a full repeal of this law, as we pledged to do, and we will work to replace it with fiscally responsible, patient-centered reforms that actually reduce costs and expand coverage.

Health care spending is driving the explosive growth of our debt. And the President’s law is accelerating our country toward bankruptcy.

Ryan makes the important point about entitlement reform: that it’s future retirees who are most at risk if we don’t tackle Medicare now:

Just take a look at what’s happening to Greece, Ireland, the United Kingdom and other nations in Europe. They didn’t act soon enough; and now their governments have been forced to impose painful austerity measures: large benefit cuts to seniors and huge tax increases on everybody.

Obamacare: The End of the Beginning

Cross-posted from National Review Online.

Sixty-eight years ago, after a long-sought victory in Egypt that marked a turning point in World War II, Winston Churchill said, “This is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”

In what will be a long and arduous struggle to bring fiscal stability and true reform to our tottering health-care system, partial Republican control of Congress was a necessary first step. But, now, the hard work begins.

The Republican health-care platform, such as it is, is pretty simple: Repeal Obamacare and replace it with incremental, common-sense, politically popular reforms. The GOP’s “Pledge to America” may therefore have been an appropriate platform for a midterm election. However, the document barely begins to address the profound and difficult issues that any serious government must. Indeed, if the early signals are any indication, the troubling reality is that the Republican health-care agenda for 2011 and 2012 may actually make it harder to repeal Obamacare in 2013, and thereby harder to achieve conservatives’ long-term goal of a humane, efficient, and fiscally sustainable health-care system.

The best way to grasp the enormous difficulties ahead is to work backwards.

Runaway growth in government spending is America’s biggest fiscal problem today. Growth in Medicare and Medicaid spending, in turn, accounts for nearly all the projected future growth in government outlays relative to GDP. If the principal domestic-policy goal of conservatives is to restore the country to a truly limited government that can live within its means, we can achieve that goal only through serious and thoughtful reform of health-care entitlements.

That is to say: For the foreseeable future, health care must become the single dominant focus of conservative domestic policy.

Hence, our first and most important problem is intellectual. Conservatives speak often of repealing and replacing Obamacare. But how many can articulate a conservative vision of what our health-care system should look like? Leading Republican politicians have plenty of detailed opinions on a broad range of subjects. But does anyone know what John Boehner’s vision is for the future of American health care? How about the main contenders for the 2012 Republican presidential nomination? To ask the question is to answer it.

FREEDOM, SECURITY, AND INNOVATION

It should be said that, within the diminutive circle of conservative health-policy wonks, there is a fair amount of agreement as to where we should go. But translating that wonkery into plain English isn’t easy.

Among less specialized conservatives, a common refrain is, “I’m not clear on the details, but that Paul Ryan sounds like he knows what he’s talking about.” And Rep. Paul Ryan’s plan is indeed a solid start. But unless other Republican leaders fully immerse themselves in health-care policy, they will be able neither to articulate the core principles of free-market health care, nor to address new issues as they arise, nor to persuade American voters that they should be trusted to enact far-reaching reforms.

The core health-care principles that Republicans should embrace can be summarized in three words: freedom, security, and innovation.

First, the conservative vision must, out of both principle and pragmatism, hold that the best health-care system is one that trusts individuals to make the choices that are best for them and their families. The liberal view of health care is the opposite: that individuals are neither knowledgeable enough nor wise enough to make health-care decisions for themselves; instead, these decisions are best left to unelected government experts.

Second, conservatives must stand firmly behind the principle of a safety net for those who are genuinely down on their luck, and also for the principle that those who pay for insurance and play by the rules will get the care that they’ve earned, without losing out on technicalities. Liberals might agree rhetorically with these principles, but they use them as a pretext for expanding the entitlement state, with destructive effects: extension of government insurance to those who don’t need it, at a cost the country can’t afford, and strangulation of private insurers with onerous regulations that the market can’t sustain.

Third, conservatives must always keep in mind that the entire point of health care is to extend and enhance life. Thus their vision can include, but must be broader than, the hot-button issues of abortion and stem-cell research. A pro-life health-care policy involves accelerating the pace of medical innovation, by reducing the regulatory and financial burdens we place on the pharmaceutical and medical-device industries. That means strengthening the influence of market forces, as opposed to subsidies and price controls, on the development of drugs and devices. It also means streamlining the FDA so that innovative new therapies can reach the market more quickly and cheaply. It means minimizing, and if possible eliminating, the ability of federal bureaucrats to deny life-extending care.

Liberals, on the other hand, tend to look askance at medical innovation. Most progressive health-care economists blame new medical technologies for rising health-care costs: costs that can, in their view, be lowered only by restricting patients’ access to those technologies. In addition, new drugs and medical technologies are developed by private companies, for profit: a concept to which many on the Left are instinctively hostile.

Health-care policy is exceedingly complex, and translating these basic principles of freedom, security, and innovation into actual legislation will not be easy. Doing so must start with three policy goals.

First, Republicans must foster a truly free market for health insurance by eliminating the differing tax treatment of employer-sponsored and individually purchased insurance. Second, Republicans must make dramatic improvements to Medicaid, using Mitch Daniels’s impressive reforms in Indiana as a template. Third, Republicans must move Medicare onto a sustainable path that puts financial control in the hands of seniors themselves rather than central planners.

On all three fronts, Obamacare moves us in exactly the opposite direction. The law will force employers to provide insurance for their employees, instead of allowing them to leave that money in their employees’ paychecks so that they can buy insurance for themselves. The law will dramatically expand Medicaid in ways that will accelerate the pending bankruptcy of several large states, even though Medicaid provides far worse care than people can obtain on their own. And the law will effectively eliminate Medicare Advantage and other programs that helped move Medicare from its traditional single-payer approach into a more market-oriented one.

THE OBAMACARE TRAP

And so, it remains true that the most critical task for Republicans in the 112th Congress is to lay the groundwork for the ultimate repeal of Obamacare. Given that House Republicans don’t have the power to repeal the law by themselves, what can they do in the meantime? More importantly, what should they do in the meantime? The question has been asked, but it hasn’t been adequately answered.

We must remind ourselves of the electoral realities. For Republicans to succeed in repealing the Patient Protection and Affordable Care Act (PPACA), they will need to control the House, the Senate, and the White House. From a political standpoint, if Republicans are not able to achieve this in 2012, they are unlikely ever to repeal Obamacare.

This means that influential Republican activists must — must — coalesce around the most electable Republican presidential candidate who can articulate conservative health-care principles. This is no time for single-issue small-ball or personal score-settling. A GOP nominee who passes all the litmus tests but can’t win in November would only succeed in making Obamacare permanent. One who can win but isn’t capable of pushing for real health-care reform wouldn’t be much better.

In turn, this means that Republican presidential aspirants must place health-care policy front and center in their campaigns. They must avoid the easy rhetorical flourishes and expend the time and effort to gain fluency in the complexities and trade-offs of health-care policy. A politician who regularly speaks of fiscal responsibility and limited government without building a mandate for actual, specific legislation to achieve them will not move the country in his direction. This is a time for serious government, and there can be no greater test of a politician’s seriousness than his command of health-care policy.

And, of course, in order to repeal Obamacare, Republicans also have to gain control of the Senate. Here, too, we cannot afford any more Delaware Debacles: We need candidates who, whatever their flaws, are electable and who pledge to vote for repeal. A realistic best-case scenario is that Republicans get to between 51 and 55 seats in the upper chamber: a majority, but not a filibuster-proof majority. In the 2010 wave election, they gained six seats, raising their total to 47. Despite the favorable turf in 2012, they are unlikely to win the 13 additional seats needed to reach 60.

Hence, full repeal of Obamacare will require the participation of Democrats. There may be some Democratic senators willing to go along with a repeal effort: Joe Manchin in West Virginia, Ben Nelson in Nebraska, and a few others. But it is very likely that even with those Democrats, there won’t be 60 repeal votes in the Senate. If that is the case, then Republicans will need to turn to the reconciliation process to roll back the law.

As we learned last year, the reconciliation process is different from the normal legislative process. The Senate parliamentarian, using Congressional Budget Office estimates, certifies measures that, either by raising taxes or by cutting spending, will reduce the budget deficit. Only deficit-reducing measures can be passed using reconciliation.

The problem for Republicans is that the CBO estimated that the PPACA would reduce the deficit by $132 billion over the 2010–2019 period. Because of amendments passed in late 2010, it’s likely that the CBO’s estimate of the cost of repeal will be even higher in 2013. Hence, a simple, two-paragraph repeal measure won’t get through reconciliation.

This is where the agenda of the next Congress comes in. In place of comprehensive health-care reform, House Republicans are promising to reverse some of Obamacare’s most unpopular elements: for example, the new 1099 provision, which requires that all businesses issue an IRS form 1099 for any payments to vendors of more than $600 per year. The CBO scores this measure as raising $18 billion for the government over ten years: indeed, that’s why it was included in the PPACA in the first place. If Congress reduces Obamacare spending elsewhere to “pay for” this tax cut, ultimate repeal could become more difficult.

The individual mandate is a more worrisome example. Last June, the CBO projected that repealing the individual mandate would reduce the deficit by $252 billion in the 2011–2020 timeframe. In making that calculation, the CBO is counting on some people under PPACA paying the fine for not purchasing health insurance, thus increasing revenues to the government; however, repeal of the mandate would generate savings by reducing the number of people who rely on Medicaid and exchange subsidies. If the mandate is eliminated, repealing the rest of Obamacare will become $252 billion harder.

Hence, if Republicans in the 112th Congress succeed in eliminating some of these provisions, they will increase the fiscal cost, as scored by the CBO, of repealing the rest of Obamacare in the next Congress. In addition, every unpopular tax increase that is eliminated now will need to be offset by additional tax increases or spending cuts, which will complicate things when the real repeal effort starts in 2013. Republicans, therefore, may be setting a trap for themselves.

THE REGULATORY INTERREGNUM

Another problem with Obamacare is regulation. The PPACA dramatically expands federal regulatory control over the health-care system, concentrating enormous power within the Department of Health and Human Services. But, because most regulations aren’t germane to the budget, from a parliamentary standpoint, it’s far from clear that Republicans will be able to use the reconciliation process to reverse Obamacare’s substantial regulatory provisions. For example, the PPACA provision requiring health insurers to keep their medical-loss ratios above 80 percent — a technicality that will drive many insurers out of business — isn’t germane to the budget, but it is highly relevant to the future of the private insurance market.

Precisely because these regulations do not affect the fiscal calculus, and therefore will not undermine Republicans’ ability to repeal Obamacare after 2012, it is here that the new House majority can be most constructive.

In other words, Republicans will be well advised to adopt a two-track strategy: using the conventional legislative process to turn back as much of Obamacare’s regulatory architecture as possible, while waiting until 2013 and then using the reconciliation process, to repeal Obamacare’s tax and spending increases.

Hence, in the near term, Republican policy experts and legislative staffers will need to come up with a comprehensive regulatory strategy, one that will entirely replace Obamacare’s regulatory architecture with a sounder one that hews more closely to conservative market principles.

The politics of smart regulatory reform are favorable, too. Remember that many of the negative headlines about Obamacare since the law passed have had to do with new regulations: the fact that McDonald’s almost dropped health coverage for its junior employees; the aforementioned medical-loss-ratio mandates, which will force many insurers to drop out of the market; the lobbyist-driven ban on new hospital construction, which preserves local hospital monopolies; and on and on. Regulatory reform is an important way for the Republican House to earn its credibility on health-care reform, while calling attention to Obamacare’s many flaws.

One other thing to keep in mind: The Prescription Drug User Fee Act — the law that Congress uses to oversee the FDA — is up for reauthorization in 2012. House Republicans should use this opportunity to reform the FDA and demonstrate that they are on the side of patients who want faster access to innovative new medicines.

MEDICARE AND MEDICAID REFORM

Finally, House Republicans must begin to build the case for real entitlement reform. Medicare is the most politically sensitive subject, but it is one where Paul Ryan has already done most of the necessary groundwork. Medicaid is an even more urgent issue, as many states are sinking under the weight of reckless commitments made by their governors in flusher times.

It will be difficult for Republicans in the next Congress to achieve much on these issues without leadership from the other side. If President Obama’s deficit commission is any indication, that leadership does not exist. The commission’s report effectively advocated rearranging Medicare’s deck chairs, and it proposed essentially nothing to address the grave problems with Medicaid.

There is one Medicare-related issue that the next Congress will be forced to deal with: the never-ending saga of Medicare’s Sustainable Growth Rate, a.k.a. the “doc fix,” which governs how Medicare reimburses doctors and hospitals for their services. Remember that the doc fix was kept out of Obamacare because it would have added $239 billion over ten years to the law’s price tag. Republicans will be under significant pressure from the American Medical Association and others to continue to pay doctors and hospitals at current rates, instead of the roughly 25 percent lower rates required by the 1997 Balanced Budget Act.

It’s not clear that Republicans should go along. For one thing, the AMA was a strong supporter of Obamacare (albeit over the dissent of many of its members). More importantly, perpetuating the doc fix will cost tens of billions of dollars: money that will have to come out of some other vital priority. Republicans in the 112th Congress will need to consider ways to address the doc fix, and other pressing problems, without jeopardizing their ability to repeal Obamacare in the 113th.

Recent history is not encouraging. In December, with bipartisan support, Congress passed doc-fix legislation that froze reimbursement rates at 2010 levels for 2011, at a cost of $19 billion. The law was “paid for” using gimmickry: an amendment to Obamacare that would require some individuals to pay back insurance subsidies they may receive at some point in the future. Republicans saw this as a victory, as the compromise reduces future Obamacare spending, albeit in a manner that will be difficult to enforce. However, in the medium term, it is a victory for the Democrats, as the measure adds to the difficulty of repealing the entirety of Obamacare using the reconciliation process.

A TIME FOR GROWN-UPS

It has been said that we campaign in poetry and govern in prose. But the experience of Ronald Reagan adds a corollary: Only those leaders who have a command of public policy before their candidacies begin can succeed at both campaigning and governing.

The problems we face are grave. If their solutions were simple, they would already have been tried. Our presidential aspirants and congressional luminaries, as well as the people who elect them, must face up to the difficult choices ahead. If they do, we just may succeed in turning Obamacare back, and putting something much better in its place.

The DNC's Talking Points on Repealing Obamacare

Cross-posted from Critical Condition on National Review Online.

As Republicans assumed power in the House of Representatives, vowing to repeal Obamacare, Democrats began readying for an intensive campaign to oppose them. With this in mind, the Democratic National Committee released a set of talking points with which they hope to persuade the public that Republican repeal efforts are misguided. Let’s see what the DNC’s sharpest operatives came up with:

Instead of working to find bipartisan solutions to create jobs, grow the economy, and make America more competitive, Republicans in Congress are spending all of their time re-fighting the political wars of the last two years by trying to repeal health reform and give control over your health care back to insurance companies. The Affordable Care Act provides Americans with more freedom and control in their health care choices.

The Democrats claim that labeling PPACA a “government take-over” is unfair. But the above paragraph gives the game away: to the degree that insurers no longer “control” health care, it’s because control has been consolidated in Washington. It’s great that Democrats claim to want to “provide Americans with more freedom and control in their health care choices,” because from a policy standpoint, providing Americans with more freedom and control means adopting free-market policies: creating a truly free, individual market for health insurance, in which consumers control their own health spending.

• [PPACA] gives families the freedom from worrying about losing their insurance, or having it capped unexpectedly if someone is in an accident or becomes sick.

Unbeknownst to many, due to spin from Obamacare advocates, the Health Insurance Portability and Accountability Act, passed in 1996, already contains all of the consumer protections that Obamacare claims to institute anew. If we had a true individual market for health insurance, in which people bought policies for themselves instead of getting them from their employers, HIPAA would never have been necessary.

Prohibiting lifetime caps on insurance payouts will drive up the cost of insurance for everyone, essentially forcing individuals to buy extra insurance that they, in all likelihood, will never need.

• It frees Americans from the fear of insurance companies raising premiums by double digits with no recourse or accountability.

This is perhaps the most ridiculous claim on the whole list. Health-care costs are not rising because of greedy, profiteering insurers. They are rising because socialized medicine incentivizes people to use more health care than they need. As Obamacare does nothing to address the rising cost of health care, insurers will continue to be forced to pass these costs onto policyholders.

As to the issue of recourse and accountability: every state in the Union has an insurance commissioner, who is responsible for reviewing and approving rate increases. Obamacare installs a redundant layer of federal regulation atop this system.

• It frees Americans from discrimination when insurance companies deny women health insurance because they are pregnant, or refuse to provide coverage to children who are born with disabilities.

Allowing women to buy insurance after they are pregnant, instead of beforehand, goes against the very nature of insurance: paying a small amount now to avoid financial risk in the future. It will incentivize women to wait until they are pregnant to buy insurance, driving up the cost of insurance for non-pregnant women.

Requiring policies to cover children born with disabilities is actually a good idea, as it will mitigate the need for subsidized high-risk pools, and reduce a significant incentive for abortion. Republicans don’t have a problem with this.

• It provides parents the choice of providing health coverage for a child after they finish school.

This is an Orwellian description of the PPACA provision that requires all new health plans to cover a worker’s “adult children” until they are 26. “Mandate” is an antonym of “choice.” This insurance mandate, like all the others in Obamacare, forces people to buy insurance they may or may not need: driving up the cost of insurance for everyone.

• It provides people the freedom to change jobs without worrying about losing one’s health insurance, or even retire a little earlier without having to worry about losing one’s coverage.

As described above, HIPAA already provided these protections, protections that an individual insurance market would achieve by definition. Contrary to the above bullet point, Obamacare-driven tax increases have incentivized companies to drop private coverage for their retirees, dumping more people into Medicare.

• It provides seniors with the freedom to get the care they need, including free preventive care, lower cost prescription drugs, and Medicare that they can count on.

Again, note the Orwellian equation of mandates with “freedom.” Closing the “donut hole” for prescription drugs under Medicare will destabilize the program by encouraging seniors to spend more on drugs than they need to, driving Medicare further into insolvency.

• And, it gives small business owners the power of competing with large employers by providing small business tax credits to make employees’ health coverage more affordable, and by increasing their purchasing power through competitive private health insurance Exchanges.

Obamacare, by driving the cost of insurance even higher with its numerous mandates, incentivizes employers to drop coverage for their employees so they can receive federally subsidized insurance. According to Dan Danner, president of the National Federation of Independent Business, “fewer than one-third of small businsesses” even qualify for the tax credit, which only lasts for a maximum of six years anyway.

• Finally, it frees our children from the threat of out-of-control government debt and deficits by holding government accountable for its spending. Independent estimates show it will reduce the deficit by a trillion dollars by cracking down on waste, fraud and abuse, and stopping hundreds of billions in unfair and irresponsible subsidies to insurance companies that are now paid by taxpayers.

If you believe this, then I have a trillion dollars of subprime debt I’d like to sell you. I, among others, have addressed this issue at length. Democrats have had two years to persuade the voters that Obamacare will reduce the deficit, and have gotten pretty much nowhere.

These new choices, freedoms and options are only possible because the Affordable Care Act holds insurance companies accountable.

With this law, insurance companies can no longer overcharge for insurance just to boost their profits and CEO bonuses. They won’t be able to deny women coverage because they are pregnant, something they classify as a preexisting condition. The law has already stopped them from denying kids coverage if they are born with a medical problem or disability. And insurance companies can no longer use fine print, or legal tricks to deny medical treatments that are covered under people’s policies.

Now, Republicans in Congress want to unravel the law that holds insurance companies in check.

Even before Obamacare, health care plans were one of the least profitable industries in America, with profit margins consistently in the 4-6 percent range: lower than those for brewers, railroads, and utilities. The idea that insurer profiteering is behind rising health costs is patently ludicrous, and you won’t even find many left-of-center health policy experts who believe it.

It’s already illegal for insurers to “deny medical treatments that are covered under people’s policies,” because that would be a violation of the insurance contract. Insurers — and consumers — have a legitimate need for protection against those who intentionally omit information about preexisting conditions from their insurance applications. Obamacare eliminates those protections, thereby allowing unscrupulous consumers to game the system, driving up the cost of insurance for everyone else.

A better reform would be to allow people to buy insurance for themselves, in a national market, where independent consumer groups can criticize plans that have worrisome fine print.

• The insurance company lobbyists are working overtime with Republicans to return to the days when insurance companies were free to do whatever they want, including raising premiums and imposing higher costs on families and businesses to protect their CEO bonuses and corporate profits.

This is simply dishonest rhetoric from the DNC. The idea that health insurance was an unregulated jungle before Obamacare came along would come as news to every state insurance commissioner. Obamacare is the best thing that has ever happened to special interests and lobbyists; increasing government control of the health care industry requires industry participants to spend more of their money on politicians’ campaigns instead of health care.

• Republicans will allow insurance companies to once again DENY coverage to children with existing conditions, CANCEL coverage when people get sick, and LIMIT the amount of care you can get − even if you need it.

• When the insurance companies are free to pursue their profits without any accountability, people have fewer choices, fewer options, and little recourse.

• And, by rolling back the Affordable Care Act, Republicans are adding a TRILLION dollars to the deficit.

• They would give back to insurance companies subsidies of hundreds of billions of taxpayer dollars. And they would cut back on efforts in the law to stop waste, fraud, and abuse in government spending. We can NOT afford to add another trillion dollars in debt that our children and grandchildren will have to pay – especially when it goes to wasteful spending and outrageous subsides for insurance companies.

Republicans are opposed to stopping “waste, fraud and abuse in government spending”? That’s a good one.

Liberals have long complained that the reason that Obamacare is unpopular is because Democrats haven’t spend enough time communicating why the law is so great. But the DNC’s talking points illustrate the real problem: the more people learn about the law, the less popular it becomes.

Podcast: Obamacare at 6 Months; The Republican Health Care Agenda

If Republicans seek to repeal Obamacare, what should they replace it with?

On Friday, I debated Jonathan Cohn, Senior Editor at The New Republic, on Public Radio International’s “To The Point,” hosted by Warren Olney. The program covered the six-month anniversary of the passage of Obamacare, and the Republican health care agenda as defined by the Pledge to America.

The health care segment of the broadcast begins at the 7:30 mark. Olney first brings on Noam Levey, Congressional reporter for the Los Angeles Times, to discuss the PPACA provisions that went into effect last week. Then, Molyann Brodie, pollster for the Kaiser Family Foundation, discusses her polls that suggest that Americans aren’t interested in repealing the law. (These Kaiser surveys suffer from methodological flaws because of the tendentious manner in which they pose their questions; the weekly Rasmussen Obamacare poll does a much better job in this respect.)

At the 23:30 mark, I first appear, along with Jonathan Cohn. I discuss why the “consumer protections” in PPACA will drive up the cost of health insurance, and what Republicans should advocate in PPACA’s place: eliminating the employer tax exclusion, and allowing individuals to buy health insurance for themselves.

Here is the audio of the full 51-minute broadcast (you can fast forward by clicking on the text in the player and dragging the grey bar around):

“To The Point” is broadcast five days a week by KCRW, the public radio station in Santa Monica, California. You can freely subscribe to their podcast via iTunes.

My Rotting Brain

Cross-posted from The Agenda on National Review Online.

Brad DeLong, the Berkeley economist, is concerned that “writing for National Review has rotted Avik Roy’s brain.” I’ll take it as a compliment, as that would at least imply that I once had a brain to begin with. I just hope that Rich Lowry reads DeLong’s stuff and decides to pick up my bar tab (or perhaps my cable TV bill).

DeLong is irked that I described the President as having “not shown a serious interest in entitlement reform.” To prove my ignorance, he cites figure A-3 from the Congressional Budget Office’s Long Term Budget Outlook. In this figure, from the CBO’s “extended baseline scenario,” the long-term projections the CBO issued this year are improved from those from last year. Hence, per DeLong, our long-term budget outlook is improved:

Why? Because of two "entitlement reforms" by Obama: the IPAB that puts a brake on the growth of Medicare costs, and the excise tax on high-cost health plans that raise revenue.

Rather than saying "the President has not shown a serious interest in entitlement reform," it would be closer to the truth for Avik Roy to say: "Obama did entitlement reform through the PPACA, and I did not notice."

Indeed, the fact that Avik Roy—and lots of other people—did not notice what current law plus PAYGO implies is what leads Doug Elmendorf at the CBO to fear that the policies enacted in the PPACA will not stand, and leads him to present an Alternative Fiscal Scenario in which the cost-containing and revenue-raising portions of the bill are repealed in fairly short order.

It is a fair criticism of Obama to say that his entitlement reforms may not last. It is not a fair criticism to claim that they were not done--or that he has "not shown a serious interest."

Why oh why can't we have a better press corps?

I would challenge nearly every sentence in there, including the last one (I’m no more a member of the press than is Prof. DeLong). He obliquely refers to the CBO’s Alternative Fiscal Scenario, implying that it only exists because reckless conservatives will repeal the fiscally responsible aspects of PPACA. So let us review the differences between the CBO’s “extended baseline scenario” and its “alternative fiscal scenario,” as described by the CBO’s Douglas Elmendorf (emphasis added):

[Under the extended-baseline scenario], the expiration of most of the tax cuts enacted in 2001 and 2003, the growing reach of the alternative minimum tax, and the way in which the tax system interacts with economic growth would result in steadily higher average tax rates. Those rising rates, combined with the tax provisions of the recent health care legislation, would push total revenues to 23 percent of GDP by 2035--much higher than has typically been seen in recent decades--and to larger percentages thereafter. At the same time, government spending on everything other than the major mandatory health care programs, Social Security, and interest on federal debt--activities such as national defense and a wide variety of domestic programs--would decline to the lowest percentage of GDP since before World War II…

The budget outlook is much bleaker under the alternative fiscal scenario, which incorporates several changes to current law that are widely expected to occur or that would modify some provisions of law that might be difficult to sustain for a long period. In this scenario, CBO assumed that Medicare's payment rates for physicians would gradually increase (which would not happen under current law) and that several policies enacted in the recent health care legislation that would restrain growth in health care spending would not continue in effect after 2020. In addition, under the alternative scenario, spending on activities other than the major mandatory health care programs, Social Security, and interest would fall below the average level of the past 40 years relative to GDP, though not as low as under the extended-baseline scenario. More important, CBO assumed for this scenario that most of the provisions of the 2001 and 2003 tax cuts would be extended, that the reach of the alternative minimum tax would be kept close to its historical extent, and that over the longer run, tax law would evolve further so that revenues would remain at about 19 percent of GDP, near their historical average.

A huge driver of the assumptions of the “extended baseline scenario” is that physician reimbursements hew to Medicare’s Sustainable Growth Rate and that Congress refuses to pass any future “doc fix” legislation. Republicans passed “doc fix” legislation when they were in power, and Democrats have repeatedly done so in this Congress. We can debate whether or not this is a good thing, but it is factually incorrect to deny that both parties are responsible. PPACA claims, preposterously, that “doc fixes” won’t happen in the future, and counts this toward its alleged budget savings.

When Elmendorf refers to the “several [other] policies that would restrain growth in health care spending,” he is primarily referring to the Cadillac tax. Insofar as the Cadillac tax is a simulacrum of ending the employer tax exclusion, conservatives like me favor it, and we must note for the record that within PPACA it was watered down not by Republicans but by labor unions.

Another big driver of the CBO’s alternative scenario is the assumption that discretionary spending would “fall below the average level of the past 40 years relative to GDP, though not as low as under the extended-baseline scenario.” Based on the Pledge to America, it is Republicans who favor the more aggressive domestic spending reductions, not Democrats.

On the tax side, DeLong is apparently arguing that taxation should go up from the historical average of 19 percent of GDP up to 23 percent: a 21 percent tax increase on every tax-paying citizen and business in America. If that’s his position, that’s fine, but surely he can accept that others aim to reduce the deficit with a greater emphasis on spending cuts, and that it is realistic to assume that the public will resist a 21 percent tax increase. Let’s not forget that the Democratic Congress is in favor of extending the Bush tax cuts to everyone except those making more than $250,000 a year, significantly slimming the fiscal disagreement between the two parties on that issue.

So, where exactly is the entitlement reform in PPACA? DeLong refers to Medicare’s new Independent Payment Advisory Board, but that board only has the limited power to cut reimbursement to doctors and physicians, and not to restructure or reform Medicare benefits. Similar efforts to restrain costs, such as the aforementioned Sustainable Growth Rate, have failed miserably, and there’s no reason to believe the IPAB will succeed where these other efforts have failed. For what it’s worth, the CBO scores the savings from IPAB at $28 billion over the first ten years of the law—a paltry sum, given the Board’s alleged centrality to entitlement reform.

Puzzlingly, DeLong refers to the “Cadillac tax” as entitlement reform: but this tax applies only to private insurance, not to Medicare or Medicaid, and therefore has nothing to do with curbing entitlement spending. Sure, it raises taxes, but those taxes will be raised not to pay down Medicare or Medicaid, but instead to fund an expansion of Medicaid and an entirely new individual insurance subsidy.

If DeLong means to include things like Don Berwick’s “Center for Medicare Innovation,” well, the law is spending a whopping $10 billion on this program over ten years, and the CBO projects savings of a less-whopping $1.3 billion for its work. Finally, if he is counting the $500 billion in savings from eliminating Medicare Advantage subsidies as “entitlement reform,” he will once again need to explain why that money is being used to create new entitlements and expand Medicaid, rather than for improving Medicare’s solvency. He doesn’t mention these things, so one could just as easily conclude that he agrees with conservative skeptics.

If PPACA had eliminated Medicare Advantage subsidies, and raised taxes, without spending all of the savings on the Medicaid expansion or the new exchange subsidies, DeLong could justly claim that the law was a major advance in fiscal responsibility, and pillory Republicans who opposed it. But instead, the law contains trillions of dollars in permanent new spending obligations: the mirror image of entitlement reform.

The Pledge's Health Care Critics

Cross-posted from Critical Condition on National Review Online.

The Republicans’ Pledge to America has come under a fair amount of criticism from both the left and the right. (On Wednesday night, I gave its health care provisions a 7 out of 10.) Some of these criticisms are fair, some are unfair, and some are based on a faulty understanding of what the Republicans are proposing. Let’s go through the criticisms.

First, let’s swing our eyes to port. Igor Volsky of the Center for American Progress put out a detailed post arguing that “the document provides almost no specifics about what the party would do to control health care spending, improve quality, or pay for its reforms. And at least 7 of the GOP’s ideas on health care are already included in the health care law.” I disagree with him on both counts.

As to the first point, the Pledge does propose measures that would curb health-care spending and improve quality. Malpractice reform would curb defensive medicine and reduce wasteful health spending. Legalizing the purchase of health insurance across state lines would dramatically reduce the cost of insurance. Expanding health savings accounts will incentivize more people to migrate to consumer-driven health plans, which will also lower costs and improve quality. Of these measures, the first two would cost the government zero; HSA expansion might reduce tax revenues somewhat (because HSAs are tax-free), but not by much given their currently low penetration.

Ezra Klein advances the argument (as does Igor) that repealing Obamacare will increase the deficit, since the CBO scored PPACA as reducing the deficit by $143 billion. Even if you believe in the omniscience of the CBO (I do not), we all know that CBO scores are heavily gamed by legislators. It is far from clear that a Republican Congress in 2013 trying to repeal the law would garner the same score from the CBO as the Democratic Congress did in 2009. Remember also that the CBO, in its scoring of PPACA, did not have time to consider the costs of most of the new discretionary spending that the law requires. Suffice it to say that deficit hawks are the ones who most dearly desire the repeal of Obamacare.

Returning to Igor, there are superficial similarities, but serious substantive differences, between the Pledge’s health-care proposals and those of PPACA. Let’s take them one by one:

1. Insurance across state lines. Republicans advocate the full liberalization of health-insurance consumption: just as I can order a laptop from California, even though I live in New York, so too can I buy health insurance. PPACA “allows” state governments to do something they could pretty much do already: enter into compacts with each other to allow for cross-border insurance sales. These compacts aren’t going to happen, especially between states with significantly different regulatory structures. The whole point of buying insurance across state lines is to liberate insurance from the lobbyist-driven mandates that drive insurance costs skyward.
2. High-risk insurance pools. The PPACA-sponsored high-risk pools are seriously underfunded and have essentially no chance of succeeding. In addition, for PPACA, they are temporary measures meant to tide patients over until the guaranteed-issue mandate (requiring coverage of preexisting conditions) goes into effect. For Republicans, high-risk pools are an alternative to guaranteed issue.
3. Pre-existing conditions. PPACA requires that insurers accept everyone who applies, regardless of preexisting conditions. This is a recipe for skyrocketing health costs, because it encourages people to wait until they are sick before buying insurance. (PPACA’s individual mandate, even if it manages to pass constitutional muster, doesn’t go into full effect until 2018.) The Republican proposal echoes pre-PPACA law: requiring insurers to cover those with prior coverage and a preexisting condition. (Jonathan Cohn objects to the Pledge because he doesn’t believe high-risk pools work: but that’s more of a philosophical objection.)
4. Lifetime and annual caps. This is the one area where PPACA and the Pledge are basically identical. This aspect of the law will increase the cost of insurance, but not by much: my actuarially knowledgeable colleagues put the cost increase at 1-2 percent.
5. Rescissions. The rescission provisions in both PPACA and the Pledge are mostly symbolic. It is already illegal for insurers to dump patients simply because they get sick: it is a violation of the insurance contract. If applicants for insurance knowingly misrepresent their health status, however, it is the beneficiary who has violated the contract. There is only a small bit of room in between these two situations for tweaking regulations.
6. State innovation. PPACA allows states to receive waivers, if the HHS secretary is so kind as to grant them, to slightly stray from PPACA’s blizzard of unfunded state mandates. Republicans favor a far more decentralized approach. PPACA clearly constrains the latitude of states to cover the uninsured; this is indeed an area in which the Republican and Democratic approaches are diametrically opposed.
7. Abortion. It is the consensus of abortion activists on both sides of the aisle that PPACA allows federal funds to pay for abortion. Republicans seek to restore the Hyde Amendment principle that taxpayer money can’t be used to fund abortions.

I should here mention that there is some confusion about exactly what Republicans are proposing. Peter Suderman, in an otherwise excellent piece, is worried that the Pledge’s promise to require insurers to cover those with preexisting conditions will lead to the famed “adverse selection death spiral.” But as I explained above, the Pledge only requires coverage for those with prior insurance, preventing healthy people from gaming the system, and thereby avoiding the death spiral. Moreover, what the Pledge is advocating has been a part of federal law since the passage of the Health Insurance Portability and Accountability Act in 1996. (For a thorough treatment of this topic, see Jim Capretta and Tom Miller’s piece in the Summer 2010 issue of National Affairs.)

Now, let’s turn to the Right. Conservative critics of the pledge are disappointed that the Pledge didn’t do more to tackle entitlement reform. Philip Klein describes the document as “reinforcing [Republicans’] timidity.” Erick Erickson calls it “perhaps the most ridiculous thing to come out of Washington since George McClellan.” Et cetera.

I share their basic disappointment that the Pledge doesn’t say much about entitlement reform. However, the news isn’t all bad. If National Review’s editors are right, that a “full accounting of Social Security, Medicare, and Medicaid” means “putting their long-term unfunded liabilities on budget,” this would be a huge breakthrough in honest fiscal accounting, and help build popular support for broader entitlement reform. Today, the deficits run by the big entitlements are not counted toward our official deficit and debt totals, even though we have to pay them off with the same borrowed taxpayer dollars.

And another of my NR colleagues, Kevin Williamson, is an actual fan of the Pledge: “You guys do appreciate that this would be more than President Reagan managed on the spending front, right?” Kevin is the fiercest deficit hawk I know — his blog, Exchequer, is singularly devoted to the subject — and his words should be weighed accordingly. “As a matter of politics,” writes Kevin, “entitlement reform is going to be a long and complex fight, and difficult to summarize in a short campaign document.”

Let’s remember that, even if Republicans take the House, they are facing a likely Democratic Senate and certain Democratic White House. There is only so much they can get done. Their approach, it would seem, is to bite off today what they can chew, regain the trust of the electorate, and build upon their successes in 2012. We’ll find out soon enough if that was a wise strategy — but it can certainly be called a plausible one.

The Pledge to America on Health Care

Cross-posted from The Agenda on National Review Online.

CBS News and other outlets have published a draft version of House Republicans’ “Pledge to America,” to be formally unveiled tomorrow in Virginia. As far as its health care provisions are concerned, on a scale of 1 to 10, I give it a 7. Given the political constraints a GOP-controlled House would face, that’s not terrible. It’s a reasonably substantive document, much more so than the 1994 Contract with America. For better or worse, the Pledge is designed to reach the broadest possible consensus, and therefore avoids some of the thorniest questions in health care policy.

We knew that repealing PPACA would be a core component of the House Republican agenda, and indeed it is. The outstanding question was: in the “repeal and replace” formulation, what would “replace” look like? The “replace” part takes special importance given that the President is certain to veto any repeal measure.

The planks of the House GOP health care platform, aside from repealing Obamacare, are: reforming medical malpractice; legalizing interstate purchasing of health insurance; expanding health savings accounts; “strengthening the doctor-patient relationship”; ensuring access for those with pre-existing conditions; and permanently prohibiting taxpayer-funded abortion. It’s a sensibly modest platform that is nearly identical to that which Republicans proposed as an alternative to PPACA throughout 2009. If enacted, it would certainly represent several steps in the right direction.

I put “strengthening the doctor-patient relationship” in quotes because it’s not clear that, other than by repealing PPACA, what the Pledge to America does to strengthen the doctor-patient relationship. The document is no more specific than stating that Republicans seek to “replace [PPACA] with common-sense reforms.”

The pre-existing conditions plank is the most detailed of the seven. This clearly suggests that Republicans were sensitive to the question of access for those with pre-existing conditions. The document advocates expanding state high-risk pools and reinsurance programs. It states that “we will make it illegal for an insurance company to deny coverage to someone with prior coverage on the basis of a pre-existing condition”: but this was already illegal prior to Obamacare. Same goes for the desire to “prevent insurers from dropping your coverage just because you get sick.” I guess it’s simpler to say that you’re in favor of these things than to explain that they are already ensconced in federal and state law.

The single best solution to the pre-existing condition problem is to eliminate the employer tax exclusion that subsidizes employer-purchased health insurance at the expense of an efficient individual market. Unfortunately, the President is opposed to such a measure, and Republicans are understandably uninterested in advocating a tax increase that the President will hammer them on.

It’s notable that abortion is the last of the seven planks, something that was true throughout the pledge: social issues were consistently listed at the back end of the various policy proposals. To me, this is tonally appropriate.

Actually, the most interesting and consequential health care proposal in the Pledge is one that appears elsewhere in the document: a promise to “require congressional approval of any new federal regulation that has an annual cost to our economy of $100 million or more.” If Republicans were ever able to get such a provision signed into law, it would have a significant impact on the regulatory implementation of PPACA, along with being an all-around excellent check upon the metastasis of the regulatory state.

Importantly, the Pledge says almost nothing about the biggest and most difficult questions in health policy: Medicare and Medicaid reform. It criticizes PPACA’s “massive Medicare cuts” without offering an alternative solution for putting the program on stable long-term footing. The fiscal section of the Pledge promises that Republicans “will make the decisions that are necessary to protect our entitlement programs for today’s seniors and future generations. That means requiring a full accounting of Social Security, Medicare, and Medicaid, setting benchmarks for these programs and reviewing them regularly, and preventing the expansion of unfunded liabilities.” About as bracing as a glass of milk.

But perhaps it would have been unrealistic to expect more. Democrats have engaged in their fair share of entitlement demagoguery, which is likely to intensify as we get closer to the election. Up to this point, the President has not shown a serious interest in entitlement reform, and so Republicans surely feel that they’re better off speaking in generalities.

It’s hard, however, to imagine serious entitlement reform taking place until politicians come forth to seek a popular mandate for reform, as Paul Ryan has tried to do. Oh well; there’s always 2012?

(Here's the full text:)

My Opponents Are Ignorant And Irrational

Cross-posted from Critical Condition on National Review Online.

I’m grateful for the thoughtful, open-minded liberals who read my work and take the time to challenge their views—and mine—on various topics. This post is not about them.

But it’s one of the most frequently recurring themes of liberal commentary on Obamacare: all of the smart people, Harvard professors, etc., support the new health care law; and the only people who oppose it are idiots, or demagogic liars who rant and rave about “death panels.”

Julie Rovner of NPR has put out the latest piece on this topic. While charitably suggesting that myths about Obamacare “have at least some basis in truth,” opponents of the law remain “still a little confused about what it does and doesn’t do.” She lists a series of “outlandish” but “popular myths about the law,” such as: Obamacare requires people on government insurance to be implanted with a microchip; the law creates a new private army for President Obama; the law dictates what you can and can’t eat; and the law requires hospitals to fire obese employees.

Hardy-har-har. Those kooky conservatives. Let’s all have a laugh at their expense.

It’s reassuring to think that the reason people disagree with you is because they’re mental. This is, indeed, an ancient theme of liberal politics, at least as old as the Victorian age, when John Stuart Mill said, “although it is not true that all conservatives are stupid people, it is true that most stupid people are conservative.” In the 20^th century, Lionel Trilling did Mill one better, describing conservatism as “irritable mental gestures which seek to resemble ideas.”

What’s funny about stories like Rovner’s is that they ignore all of the myths that supporters of the law believe. Like, for example, all of the people who flooded the phone lines of insurers and doctors’ offices, asking “Where do we get the free Obama care, and how do I sign up for that?”

How about the fact that, according to a Kaiser poll, 46 percent of Americans believe that the law will be “very or somewhat successful” in “reducing the total amount the country spends on health care,” and that 51 percent believe that it will “reduce the amount the average American has to pay for health care and health insurance”? Or, how about all of the commentators and reporters who believe (or claim to believe) that PPACA will reduce the budget deficit?

Apparently, hundreds of millions of Americans haven’t yet received the latest PowerPoint presentation from Families USA, advising Democrats against “claiming ‘the law will reduce costs and deficit.’”

Then there are the people who believe that insurers are absurdly profitable (their 3-6% profit margins rank them among the worst American industries); those who believe that taxpayer-funded health care is “free”; etc. etc.

One has to take all of these polls with a grain of salt.  After all, 34 percent of Americans believe in UFOs. Another poll once showed that 29 percent of black New Yorkers believed that AIDS was “deliberately created in a laboratory in order to infect black people.”

Liberals do themselves a disservice by promulgating these comforting delusions about the stupidity of conservatives. Politically, it prevents them from recognizing the unpopularity of Obamacare. Most importantly, it prevents them from recognizing well-founded criticisms that could have led to better policy.

Weekend Links: CastroCare, RomneyCare, and McGovernCare

Cross-posted from The Agenda on National Review Online.

Laurie Garrett has a thoughtful piece on the precarious state of the health care system in Cuba in the latest issue of Foreign Affairs. For those who don’t want to spend 99 cents on the article, John Graham has a post on it over on Critical Condition.

Michael Cannon does a persuasive job taking down Jonathan Gruber’s defense of the Massachusetts health care system in the Wall Street Journal.

Philip Klein reports on the renewed push for single-payer health care at the Netroots Nation 2010 conference in several posts. The speeches that he refers to, from Melinda Gibson,  Harry Reid, and others will be posted on-line by the conference organizers after its conclusion.

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Partisanship And The Health Care Debate

Cross-posted from The Agenda on National Review Online.

I’ve previously praised Maggie Mahar as a knowledgeable health-care analyst who conservatives can engage on empirical issues. She’s disappointed me with her discussion of Donald Berwick.

In a discussion of Ezra Klein’s contention that conservatives should be happy with Berwick’s recess appointment, she calls attention to one of the deficiencies in the health care debate of the last year:

What I like about Klein’s argument is that it follows one of the first rules of combat: “Confuse your enemies.” Make no mistake, the battle between health care reformers and hard-line conservatives has just begun, and Klein’s column must have left many conservatives scratching their heads.

I appreciate that people on both the left and right tend to think of their political opponents as “enemies,” but this approach had a destructive effect on the production of the Patient Protection and Affordable Care Act. Health care policy is extremely complex, and we’re all capable of getting things wrong. If those who disagree with Mahar are the enemy, it is unnecessary for her to address their criticisms, incorporate their salutary ideas, or find areas of bipartisan agreement. Conservatives, in Mahar’s view, “tend to be wary of science” and “prefer that medicine remain mired in custom” rather than empiricism. Quite the opposite is true: conservative critiques of liberal health-care policy revolve, in large part, around its lack of empirical rigor.

I was reminded, in reading Mahar’s remarks, of Jonathan Cohn’s valedictory column closing out The New Republic’s health-care blog. Cohn expressed regret that TNR had published articles critical of the Clinton health care effort in 1993; his new editor, Franklin Foer, “wanted universal health care to become the magazine’s new crusade.” This time around, Cohn and his allies would deploy campaign-style rapid-response articles against adverse news and analysis. Sympathetic reporters would similarly ignore the arguments of skeptics, until the bill was safely signed into law.

TNR is a journal of opinion, and its writers have every right to their point of view. There will always be passionate philosophical differences between the right and left on health care. But those who engage health care questions in a partisan and uncritical fashion are likely to get the answers wrong, at great cost to the country. The last 45 years are proof enough of that.

What Progressives Know For Sure About Health Care

Cross-posted from The Agenda on National Review Online.

Mark Twain may or may not have once said, "It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so."

In an unintentionally ironic blog entry for The Economist, Matt Steinglass cites this aphorism as an explanation for conservative ignorance about Obamacare. In Steinglass' telling, conservatives hold "factually incorrect ideological beliefs" about the Patient Protection and Affordable Care Act, and engage in "mis- or disinformation" about the law.  ("Factually incorrect ideological beliefs" is a bit of a mouthful; perhaps we could call them FIIBs for short?)

He contends that there were two especially egregious examples of conservative disinformation in the healthcare debate: (1) that Obamacare was a "government takeover" of the healthcare system, when in fact it is "an entirely private-insurer, free-market-based reform"; (2) that Obamacare "involved government 'death panels' that could decide to withhold care from elderly patients on a cost-benefit basis." Even worse, "the better-informed [conservatives] thought they were, the more likely they were to be wrong" (i.e., to believe the two great FIIBs).

For a guy inveighing against the "epistemic closure" of the Right, Steinglass makes no effort to defend the proposition that these two contentions are, in fact, FIIBs. Rather, he accepts as fact, and/or believes it obvious, that Obamacare is free-market-based, and that newly-established government panels would not attempt to withhold care from the elderly.

However, very few observers on either the Right or the Left would agree with Steinglass' outlandish assertion that Obamacare "is an entirely private-insurer, free-market-based reform." Ezra Klein and other liberals describe the law as a "huge progressive victory" precisely because it moves us further away from a free market for health care (not that we had much of one to begin with). The law contains sheaves of intrusive regulations that redefine how insurers must operate, what their policies must contain, and what their profit margins must be. It adds 20 million people to the rolls of Medicaid, a government-run health insurance program, and federally subsidizes the care of millions more. Finally, it, for the first time in American history, it requires that all Americans, simply by virtue of residing in the United States, purchase a product (i.e., health insurance). These are all, dare I say, obvious points; but in the interests of epistemic aperture, I raise them.

Perhaps what Steinglass means to say is that, because Obamacare does not create a government-run single-payer system, it is "entirely private-insurer" and "free-market-based." But this would be a misunderstanding of the terms "entirely" and "free-market." The government does not have to completely take something over in order to effectively take it over. If you have the right to free speech, but a new law says you can only express yourself freely in certain designated areas from 9 a.m. to 7 p.m., and that criticism of any institution except the government is allowed, do you live in a "free-speech-based" system?

And then to "death panels." This has indeed been a sore spot on the Left. I can understand why; most liberals sincerely believe that their policies will make the world a better place (and that their opponents seek the opposite). Hence, to them, it is preposterous that they are trying to kill Granny by instituting an Independent Payment Advisory Board and/or end-of-life counseling.

On this question, the controversy is not about facts, but about predictions. Progressives believe that because their policies are intended to result in quality health care for all, they will. Conservatives believe that there are unintended consequences to major policy changes, that things don't always turn out the way they are intended. (The most cynical conservatives suspect that Obamacare had nothing to do with health care, and is instead a big Trojan horse for income redistribution.)

For FIIB number two, conservatives have more evidence than do progressives to support their predictions. Jim Towey's harrowing accounts of developments at the Department of Veterans Affairs demonstrate what can happen when advocates of physician-assisted suicide infiltrate the end-of-life counseling process. And the new Medicare Independent Payment Advisory Board (IPAB) is explicitly charged with capping Medicare spending, by denying reimbursement to doctors and hospitals for tests and therapies it deems less cost-effective. To argue otherwise is simply not honest. Conservatives see no reason why the IPAB would not ultimately evolve into a facsimile of Britain's National Institute for Health and Clinical Excellence (NICE), which now assigns a monetary value—£20,000-30,000 per "quality-adjusted life-year"—above which NICE denies treatment.

Steinglass may not have a lot of expertise on health care issues; it may be that his rather basic errors are the result of trusting the assertions of other progressives who have made similar arguments. But isn't that the epitome of "epistemic closure"?

Is The Healthcare War Ending, Or Beginning?

Rasmussen Reports: 55% favor repeal of Obamacare.

Conventional wisdom holds that, now that the Patient Protection and Affordable Care Act of 2009 is law, it will be politically, if not mathematically, impossible for Republicans to repeal it. Republicans will need a majority in the House, a filibuster-proof majority in the Senate, and the Presidency—which seems impossible. On top of that, as I write in my previous post, Democrats believe that the law's immediate benefits will outweigh any drawbacks.

But a surprising development over the past few days has been the coalescence in the conservative blogosphere of a movement to repeal Obamacare, and replace it with better reforms. This stance initially elicited resistance from elected Republicans, but is gaining consensus among them as well. For his part, the President says, "Go for it."

But now, there is data that suggests that the "Repeal and Replace" campaign is not as crazy as it sounds. Rasmussen Reports, a prominent Washington polling service, finds that 55% of Americans favor repeal (h/t The Weekly Standard):

The latest Rasmussen Reports national telephone survey, conducted on the first two nights after the president signed the bill, shows that 55% favor repealing the legislation. Forty-two percent (42%) oppose repeal. Those figures include 46% who Strongly Favor repeal and 35% who Strongly Oppose it.

In terms of Election 2010, 52% say they’d vote for a candidate who favors repeal over one who does not. Forty-one percent (41%) would cast their vote for someone who opposes repeal.

Not surprisingly, Republicans overwhelmingly favor repeal while most Democrats are opposed. Among those not affiliated with either major party, 59% favor repeal, and 35% are against it.

Most senior citizens (59%) also favor repeal. Earlier, voters over 65 had been more opposed to the health care plan than younger adults. Seniors use the health care system more than anyone else.

A number of states are already challenging the constitutionality of that requirement in court, and polling data released earlier shows that 49% of voters nationwide would like their state to sue the federal government over the health care bill.

Rasmussen Reports will track support for the repeal effort on a weekly basis for as long as it remains a significant issue. The next update will be released Monday morning.

Stay tuned.

The Top Ten ‘Benefits’ of Obamacare, Seven of Which Aren’t

Cross-posted from Critical Condition on National Review Online.

Democrats, such as Sen. Dick Durbin (D., Ill.), say they are eager to campaign against Republicans who seek to repeal their health-care legislation. "The Republicans will have to stand up and say we want to repeal those things and I think that will be hard, because people will begin to realize these are commonsense changes," said Durbin.

Indeed, as Grace-Marie Turner mentioned in National Review, Democrats have posted a list of the "Top Ten Immediate Benefits" that they argue that individuals will gain from the legislation.

But there is no such thing as a free lunch, and many of these "benefits" are accompanied by unmentioned costs. If you require that every restaurant serve Kobe beef instead of USDA Choice, diners might see that as a "benefit" — until their waiter gives them the check.

Let's go through the Democrats' top ten, point-by-point:

1. Prohibit pre-existing condition exclusions for children in all new plans. This will increase the cost of insurance for everyone else. Net negative.
   
2. Provide immediate access to insurance for uninsured Americans who are uninsured because of a pre-existing condition through a temporary high-risk pool. High-risk pools are a good way to improve coverage of those with pre-existing conditions, which is why John McCain advocated them in the 2008 Presidential campaign. Unfortunately, the Democratic bill doesn't do enough to make them feasible. Net neutral to positive.
   
3. Prohibit dropping people from coverage when they get sick in all individual plans. Insurers shouldn't drop people when they get sick, unless they have an extremely good reason, such as misrepresentation of a pre-existing condition. The onus should be on insurance companies, therefore, to investigate these things up front before taking consumers' money. This mandate will have the side effect of making applications for insurance more onerous. Net positive.
   
4. Lower seniors' prescription-drug prices by beginning to close the donut hole. As a flat-out subsidy, yes, this will appear to seniors to be a straightforward benefit. But it is accompanied by a far larger cut: the obliteration of Medicare Advantage. Net negative.
   
5. Offer tax credits to small businesses to purchase coverage. The tax credits will not be enough to compensate for two things: (1) an Obamacare-driven acceleration in the rise of the cost of health insurance; (2) the employer mandate, which requires that any small business with more than 50 employees provide health insurance to every employee or pay a fine equal to $2,000 multiplied by the entire number of employees in that company. Net negative.
   
6. Eliminate lifetime limits and restrictive annual limits on benefits in all plans. Yet another mandated "benefit" that will drive up the cost of health insurance. Net negative.
   
7. Require plans to cover an enrollee's dependent children until age 26. See #6, though if this provision increases the number of young people with health insurance, it could improve the risk pool and have a salutary effect on insurance costs. Net neutral to positive.
   
8. Require new plans to cover preventive services and immunizations without cost-sharing. See #6. Another clumsy mandate that will drive up the cost of insurance. Most plans already encourage prevention — but prevention has no impact on long-term health care costs, since we all have to eventually die of something. Net negative.
   
9. Ensure consumers have access to an effective internal and external appeals process to appeal new insurance plan decisions. Yeah, except that a new government agency, the Independent Medicare Advisory Board, is now empowered to bar reimbursement for any insurance claims it deems fit. And its decisions, enacted by unelected bureaucrats, can't even be appealed by Congress, let alone consumers. We know from experience that once Medicare stops reimbursing for something, private insurers usually follow. Net negative.
   
10. Require premium rebates to enrollees from insurers with high administrative expenditures and require public disclosure of the percent of premiums applied to overhead costs. Once again, this is a mandate that will only drive up insurance costs. If an insurer is required to spend 85 percent (say $850 of every $1,000) of premiums on patient care (hence $150 in "overhead"), but the company needs to spend $200 on administrative costs to ensure that its plans run effectively, they will simply raise premiums by $333 in order to ensure that the percentage of premiums spent on overhead remains the same. Net negative.
    

So, of the Democrats' top ten "benefits," seven have direct, opposing costs of an even greater magnitude. The remaining three provisions, if we're lucky, might work out. But we haven't even gotten started with all of the other mandates and tax increases in the law for which there are no upsides. The Democrats' list demonstrates that we have a long way to go before our political class understands the very basics of how insurance works.

Progressives Hate the Bill, Too

Cross-posted from Critical Condition on National Review Online.

For those who are dismayed by yesterday's outcome, and are thinking about what to do next, read this piece in the Huffington Post. In it, Firedoglake founder Jane Hamsher describes 18 myths about the health care bill, from the progressive point of view.

Her criticisms of Obamacare are withering, and are important to understand. Her 18 myths (with detail in the full article) are:

1. This is a universal health care bill.
   
2. Insurance companies hate this bill.
   
3. The bill will significantly bring down insurance premiums for most Americans.
   
4. The bill will make health care affordable for middle class Americans.
   
5. This plan is similar to the Massachusetts plan, which makes health care affordable.
   
6. This bill provides health care to 31 million people who are currently uninsured.
   
7. You can keep the insurance you have if you like it.
   
8. The "excise tax" will encourage employers to reduce the scope of health care benefits, and they will pass the savings on to employees in the form of higher wages.
   
9. This bill employs nearly every cost control idea available to bring down costs.
   
10. The bill will require big companies like Wal-Mart to provide insurance for their employees.
    
11. The bill "bends the cost curve" on health care.
    
12. The bill will provide immediate access to insurance for Americans who are uninsured because of a pre-existing condition.
    
13. The bill prohibits dropping people in individual plans from coverage when they get sick.
    
14. The bill ensures consumers have access to an effective internal and external appeals process to challenge new insurance plan decisions.
    
15. This bill will stop insurance companies from hiking rates 30%-40% per year.
    
16. When the bill passes, people will begin receiving benefits under this bill immediately.
    
17. The bill creates a pathway for single payer.
    
18. The bill will end medical bankruptcy and provide all Americans with peace of mind.

As she summarizes, "Real health care reform is the thing we've fought for from the start. It is desperately needed. But this bill falls short on many levels, and hurts many people more than it helps."