“Ricocheting Around The Conservative Media”: How A Wildly Misleading Obamacare Horror Story Is Born
Far too many breathless news stories about insurance plans being “canceled” or people facing “sticker shock” fail to convey even the most basic context: this is almost exclusively a phenomenon of the individual insurance market, which covers between 5 to 6 percent of the population.
Some of those people – mostly younger, healthier people who, because they’re in the top third of the income distribution aren’t eligible for subsidies – will have to pay higher premiums for more comprehensive coverage, even if they don’t want to. This can cause real economic hardship, and that’s a legitimate issue.
But it’s still an issue that will affect only a small slice of the population. Jonathan Gruber, a health care expert at MIT, estimates that around half of those six percent won’t experience any real change. “They have to buy new plans, but they will be pretty similar to what they had before,” he told Ryan Lizza. “It will essentially be relabeling.”
Gruber adds that most of those plans being canceled run afoul of a provision of the law banning any policy that requires people to pay more than $6,000 per year in health care expenses – plans that may lead to medical bankruptcies, the number one type of bankruptcy in the US.
That leaves about three percent of Americans who may face that tough situation where they have to pay more for coverage they may not want.
That’s not the impression you’d get from most media sources, and certainly not from the law’s ideological foes. Avik Roy, for example – a conservative columnist for Forbes who has not exactly distinguished himself for his honesty in the debates over Obamacare – has a piece today that’s remarkable both for its mendacity and its alarmism.
Roy’s headline is, “Obama Officials in 2010: 93 Million Americans Will be Unable to Keep Their Health Plans Under Obamacare.” And his claim rests on a very simple bait-and-switch…
“The [administration’s] mid-range estimate is that 66 percent of small employer plans and 45 percent of large employer plans will relinquish their grandfather status by the end of 2013,” wrote the administration on page 34,552 of the Register. All in all, more than half of employer-sponsored plans will lose their “grandfather status” and get canceled.
Note that “…and get canceled” are Roy’s words, not those of the Obama administration in 2010. And those words are completely misleading – falsely suggesting that tens of millions of people will feel a real impact like that three percent discussed above.
That an insurance plan is “grandfathered” only means that it has been in existence, with minimal changes in benefits or cost-sharing, since before the law was enacted. Roy would have his readers believe that all these plans will be “canceled,” but most group plans lose their grandfathered status by coming into compliance or through other changes that are routine in our insurance system and always have been. All grandfathered plans will lose their status over time, meaning for the most part that, as Gruber put it, they’ll be ‘relabelled.’ Nobody will notice these “cancellations.”
In fact, large-employer plans don’t even have to conform to those coverage requirements (they do have to follow certain other rules). And the share of workers in grandfathered plans has been shrinking for several years – from 56 percent in 2011 to 36 percent this year – yet we only started hearing about this as an issue in the past few weeks.
In the small-group market, some plans may need to add a missing benefit – maybe pediatric dental and vision care, for example – and premiums will rise accordingly, but that’s a far cry from Roy’s spin.
The reality, according to a 2012 study by the Urban Institute, is that “95 percent of those with some type of insurance coverage (employer, nongroup, public) without reform will have the same type of coverage under the ACA .” Maybe a different plan name, but the same type of coverage.
Yet one can be certain that Roy’s claim that 93 million Americans will be harmed when their insurance policies are “canceled,” while misleading on its face, will be ricocheting around the conservative media, taken as prime evidence that Obamacare is ruining millions of lives when, as Jonathan Gruber puts it, 97 percent of Americans are either untouched by the law or are clearly winners.
By: Joshua Holand, Moyers and Company, Bill Moyers Blog, October 31, 2013
“Casting Aside The Weak And Fragile”: Cuts To Food Stamp Program Reveal Congressional Hypocrisy
For decades, I’ve proudly asserted that “nobody starves to death in America.” The comment has been addressed to acerbic critics of the American government, often foreign visitors, who insist that the United States is a mean-spirited place that casts aside its weak and fragile citizens.
I still contend that nobody starves to death here, but I’ve had to modify my claims about the country’s social safety net. Even if no one dies for lack of basic nutrition, plenty of people go to bed hungry every night. And if Congress’ harsh Republican caucus has its way, some may starve.
That’s because the band of ultraconservatives who control the House are bent on deep cuts to the Supplemental Nutrition Assistance Program (SNAP), otherwise known as food stamps. They passed a farm bill laden with welfare for farmers, but they left out one of its biggest traditional components: food stamps. It was the first time since 1973 that the nutrition program had been left out of the farm bill.
Now, negotiations have started between the Senate and the House to try to reconcile the upper chamber’s more charitable version with the one the lower chamber put together. It will be a tough slog since the two bills are billions of dollars apart. The Senate wants to cut $4 billion from SNAP over 10 years, while the House wants to cut nearly $40 billion.
Perhaps the most appalling thing about the farm bill presented by the ultraconservatives in the House is that it makes little pretense of cutting spending by ferreting out wastefulness or fraud, no feint at an all-out assault on the deficit. Instead, this is just a base and ugly assault on the working poor.
Oh, conservatives claimed that their cuts to food stamps were in response to fraud, as their claque filled the airwaves with the same example of a carefree California surfer enjoying his “wonderful” life on food stamps. They neglected to point to government data which show that SNAP is among the most efficient of government programs, with fraudulent spending restricted to about 2 percent of its budget.
Meanwhile, the same conservatives have said nothing — nothing — about the millions of dollars in fraud related to farm subsidies. A June audit by the Government Accountability Office found that millions of dollars in subsidies have been sent to farmers who’ve been dead for at least a year. That’s just the illegal stuff.
That doesn’t touch the entirely legal fraud: The entire network of agricultural subsidies is a massive boondoggle, welfare to people who hardly need it. While conservatives hector the working poor about their alleged laziness, some agricultural programs pay farmers not to plant. Why don’t Fox News and Rush Limbaugh ever talk about that?
Farmers hardly need the money. (Forget about the struggling family farmer of lore. He has largely disappeared.) Earlier this year, the Agriculture Department projected that farm income in 2013 would be $128.2 billion, the highest since 1973.
One of the more egregious examples of the sheer hypocrisy surrounding the debate over the farm bill was revealed by The New York Times, which wrote about U.S. Rep. Stephen Fincher (R-TN). He voted for the bill that eviscerates SNAP, but he received nearly $3.5 million in farm subsidies from the government between 1999 and 2012, according to the Times.
“We have to remember there is not a big printing press in Washington that continually prints money over and over,” he said, apparently without irony.
Conservatives claim to be alarmed by the dramatic increase in food stamp outlays, up 77 percent since 2007 to a record high of $78.5 billion in fiscal year 2012. (The SNAP program is already scheduled for a 5 percent cut as a provision related to the 2009 stimulus bill lapses.) But that’s because so many more people are struggling to make ends meet.
The Great Recession accelerated a trend that has hollowed out the middle class, leaving many Americans without college degrees in a downward spiral. The U.S. Department of Agriculture estimates that nearly 49 million Americans are “food insecure” — bureaucratese that means they don’t have enough to eat.
If we aren’t willing to see to it that they have basic nutrition, I’ll have to reconsider what I believe about my country.
By: Cynthia Tucker, The National Memo, November 2, 2013
“Plan Versus No Plan”: Virginia’s Gubernatorial Race Is A Referendum On ObamaCare, And The GOP Is Going To Lose
Republican Ken Cuccinelli became a national conservative star as Virginia’s attorney general by leading the legal fight to declare the Affordable Care Act unconstitutional all the way to the Supreme Court. Now he’s running for governor, and he’s making health care the defining issue of his campaign.
As the federal rollout continues to be plagued by website problems and renewed criticism over discontinued low-coverage individual plans, Cuccinelli told his supporters Monday, “We need people to know Nov 5th in Virginia is a referendum on ObamaCare.” His latest ad slams Democratic opponent Terry McAuliffe for wanting to “EXPAND OBAMACARE,” and closes by saying “to stop ObamaCare and higher taxes, there’s only one choice.” Outside conservative groups are also running ads excoriating McAuliffe as a supporter of ObamaCare.
Virginia voters appear to agree with Cuccinelli that health care is one of the most important issues of the campaign. The Washington Post poll conducted October 24-27 asked likely voters how important eight different issues were to determining their vote. Along with job creation and education, health care tied for first, with 72 percent saying those issues were “very important.”
And yet, in that same poll, Cuccinelli is losing by 12 points.
In fact, Cuccinelli is losing in every single poll that’s been taken in this race save for one in early July, suggesting that his defeat is a near-certainty.
Republicans are clinging to a bit of hope after a Quinnipiac poll released this week showed him only down by 4 points. But that poll only shows a minor tightening — within the margin-of-error — relative to the previous Quinnipiac poll from earlier in the month. Further, both Quinnipiac and the Washington Post polls peg Cuccinelli’s level of support around a meager 40 percent. And both polls show a third-party candidate in the race drawing support away from both major party candidates, which suggests if the also-ran fades in the stretch it won’t upend the stable trajectory of the race to date. (The Huffington Post synthesis of all the polls to date estimates McAuliffe’s lead to be a healthy eight points.)
Why isn’t health care helping Cuccinelli in the swing state of Virginia, despite all the very real problems ObamaCare has been facing this month? After all, the candidates’ positions on health care couldn’t make the choice any clearer. Cuccinelli wants the law repealed. McAuliffe says “it’s time to implement the law” by accepting federal money so the state can expand Medicaid coverage for the working poor, and having Virginia establish its own health insurance exchange.
The simplest answer is: McAuliffe’s position is shared by a whole lot of Virginians.
A plurality of 49 percent supported ObamaCare in a different Quinnipiac poll taken October 2-8. Voters said McAuliffe would do a “better job” on health care by a nine-point margin over Cuccinelli.
Of course, now that the shutdown is over and the program’s rollout is suffering significant flak, you might expect those numbers to worsen for McAuliffe. But this week’s Washington Post poll finds voters now trust McAuliffe to do a “better job” on health care by a whopping 21-point margin.
There is another plausible reason: Republicans still refuse to bolster their criticism of ObamaCare with serious policy alternatives.
Despite Cuccinelli’s insistence that the election is a referendum on ObamaCare, his website fails to include a page dedicated to what he would do about health care. Instead, he buries a few paragraphs on health care on his overall “Issues” page, which offers several conservative buzzwords but no actual policy specifics. Meanwhile, McAuliffe spells out his health care agenda in a seven-page white paper.
Plan beats no plan.
Despite all the troubles the Obama administration has had in getting ObamaCare off the ground, what’s been clear all month is this: Whatever misgivings and uncertainties persist, millions of people are going to Healthcare.gov and want the new system to work. But only Democrats, and a very small number of Republican governors, are showing a commitment to making the system work.
This should be a wake-up call to Republicans who thought the shaky Affordable Care Act rollout would shred belief in governmental competence, undermine liberalism, justify conservative obsession with repeal, and infuse Republicans with fresh momentum.
Because as this Virginia race shows, without plausible Republican policy alternatives, Democrats will able to ride out the inevitable hiccups that come with implementing new government programs and avoid any mass anti-government backlash. Simply hating on ObamaCare has not, is not, and will not be a potent political weapon.
By: Bill Scher, The Week, October 31, 2013
“Show Your Invisible Hand”: The SEC Should Make Corporations Disclose Political Contributions
A core assumption of the Supreme Court’s opinion in 2010’s troubling Citizens United case, which broadened corporations’ abilities to use their money for political purposes, was that shareholders could decide for themselves whether they agreed with the ways that money was being spent.
According to Justice Anthony Kennedy, who delivered the opinion for the Court, “With the advent of the Internet, prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters. Shareholders can determine whether their corporation’s political speech advances the corporation’s interest in making profits, and citizens can see whether elected officials are ‘in the pocket’ of so-called moneyed interests.”
The problem with this particular assumption, which economists call perfect information, is that corporations are — surprise surprise — not legally obligated to share information on political spending with their shareholders or the public. In August 2011, a group of high-profile law professors filed a petition with the Securities and Exchange Commission, calling on the agency to require public companies to disclose what corporate resources they spend on political activities because “most political spending remains opaque to investors in most publicly traded companies.”
Why do companies spend money on politics? The answer seems obvious: they want to generate profits. They are seeking advantages like reduced trade barriers, government contracts, easier regulatory inspections, and lower tax rates. For more on this point, see my colleague Tom Ferguson’s recent paper with Paul Jorgensen and Jie Chen, which reveals how “Too Big to Fail” Wall Street firms and telecom companies have captured the GOP and the Democrats, respectively. (As an aside, isn’t it odd that the same companies orchestrating the expansion of the surveillance state are so concerned about their own privacy?)
But there is sufficient research to suggest there is another, more covert reason that has serious consequences for shareholders. In my recently published Roosevelt Institute paper on the costs and benefits of this disclosure rule, I cite several studies that show corporate executives frequently spend on politics for their own personal advantage rather than the company’s bottom line. These personal benefits include things like prestige, a future political career, star power, or assistance for political allies.
With these kinds of distorted incentives, the lack of information available to the public about corporate political spending puts shareholders and potential investors at enormous risk. Why would they want to invest in a company that is undertaking activities that are more likely to benefit its executives than its investors? Requiring corporations to disclose their political spending, on the other hand, would do the following:
—Enable investors to make informed investment decisions. Good information is always key to helping potential shareholders calculate the risk they are taking by investing in a company or helping current shareholders decide if they want to hold on to a company’s stock.
—Create the motivation for corporate executives to focus less on their own personal benefit and more on the political spending that would increase shareholder wealth. By disclosing their political activities, corporate executives would have less of an opportunity to waste company resources for their own advantage.
—Benefit corporations that already share their political spending information. Research suggests companies that already disclose SEC-required information enjoy a bump in stock returns when the particular rule is put in place.
Two years after the lawyers submitted their petition, File No. 4-637 is finally on the SEC’s official agenda and support for the disclosure rule is overwhelming. Recent polling finds that 79 percent of surveyed Republicans and nearly 100 percent of Democrats support the rule, and more than 600,000 public comments supporting the rule have been submitted to the SEC. Major institutional investors are also in agreement. Former Vanguard mutual fund CEO John C. Bogle, six state treasurers, CalPERS and other pension funds, and many more are also in support. The rule also has the endorsement of small-business owners across the country, as large companies have a competitive advantage over smaller businesses because of their ability to influence lawmakers and agencies through campaign contributions and lobbying.
The pushback against disclosure is typically about the costs of disclosure. But companies already have to document their political spending for the IRS, so the additional cost would be, at most, the few hours it would require an employee to copy and paste data from an internal file into a public one. Furthermore, companies already submit annual forms to the SEC. The political spending information would simply be a few additional lines of text added to these forms.
A more valid concern about this rule is that, if companies are required to disclose this information to the SEC, the information could be exploited by their competitors and harm the companies’ bottom line. But corporate political activities are already well known among industry competitors. In fact, sometimes political spending is even coordinated among industry groups. The people who are actually excluded from this information are the ones who need it most: investors.
At a briefing held this past Wednesday organized by the Corporate Reform Coalition, Senators Elizabeth Warren (D-MA) and Robert Menendez (D-NJ) called for the SEC to finally adopt this important rule. “There is no excuse,” said Warren, “There is no reason […] for saying a corporation wants to be able to spend shareholders’ money and not tell shareholders how that money is being spent.”
By: Susan Holmberg, The National Memo, November 1, 2013
“Let’s Take A Step Back”: Despite Crappy Journalism, Things That Are Still True About Health Care
It’s been a pretty intense month on the health-care front, what with the beginning of open enrollment for the new exchanges giving rise to lots of disingenuous fulminating from Republicans, not to mention a whole lot of crappy journalism. Any time a story dominates the news for a couple of weeks, there’s a temptation to believe that what’s happening now will change everything. So I thought it might be a good idea to take a step back and remind ourselves about some things that are still true about the Affordable Care Act and still true about health care in America.
Over the long term, the problems with Healthcare.gov won’t have much of an effect on the success or failure of the law.
Yes, it has been a huge screw-up, with both the administration and the contractors sharing responsibility. Yes, it has caused a lot of people trying to sign up for new insurance a lot of hassle. But it’s the thing everybody’s focused on now in part because it’s the only thing happening with the law, until January 1st when a whole bunch of the law’s other provisions also go into effect. The problems with the web site are finite and fixable, and five years from now all this will seem like a minor footnote in the whole story.
Even if everything works perfectly with the ACA, we’re going to have a very expensive system for a long time.
The law did many things to try to “bend the cost curve,” including things like rewarding hospitals for reducing their readmission rates so there isn’t such an incentive to just pile on the procedures. But the fundamental fact is that America’s health-care system is far and away the most expensive in the world—nearly twice as expensive as the average for OECD countries—and it will still be very expensive for the foreseeable future.
There are many reasons why, but what they come down to is that there are lots of actors—insurance companies, hospitals, doctors, device makers—who make ungodly amounts of money off our health-care system, and unwinding all their influence and the points at which costs get driven up is unfathomably complicated. Other countries’ systems were designed by asking how good care can be delivered to everyone at a cost the country can afford; our system, outside of the government parts like Medicare, was basically designed by asking how to make sure everybody except patients can make as much money as possible. At its heart, the ACA doesn’t question that fundamental premise. So the curve may bend, but it won’t bend too sharply, and it’s starting from a very high place.
The expansion of Medicaid is the most significant thing the law did to help uninsured Americans.
It’s easy to forget, with all this talk about people on the individual insurance market, that they make up a small portion of the country. The most meaningful part of the ACA was always its expansion of Medicaid, promising to finally give insurance to millions of Americans who can’t afford it. So far, people signing up for Medicaid are significantly outnumbering those signing up for new private insurance, which isn’t surprising, especially given Healthcare.gov’s problems. And every time a poor family signs up for Medicaid, it’s cause for celebration—they’ll be healthier and more secure, they’ll be more productive at work, and the whole community benefits.
The Republican sabotage campaign against the ACA is unprecedented in American history. You can’t blame every problem the law has or will have on Republican sabotage, but this isn’t hyperbole. It truly is something we’ve never seen (here’s a recap). The only thing that comes close is efforts in the South to resist the school desegregation mandated by Brown v. Board of Education. That isn’t an excuse for any failures of the Obama administration, but it has made everything harder.
Republicans criticizing the ACA have no idea what they’d do to improve the health-care system. If you ask them, they’ll say, “Um … tort reform?” There are a very small number of conservative health-care wonks out there (like the people who came up with the plan that became Romneycare which became Obamacare!), but their ideas are laughably small-bore. Republicans are essentially satisfied with the pre-ACA status quo, with 50 million uninsured Americans and skyrocketing costs. That doesn’t necessarily mean that any particular critique they make of the ACA is wrong by definition, but it’s good to keep in mind.
There’s still no good reason your job should determine your health coverage. The linking of health insurance and employment is an historical accident. When wages were frozen in World War II, companies began offering insurance as a way to attract better workers, unions began demanding it as part of contracts, and today around 80 percent of American get their coverage through their job. One of the best things the ACA does is eliminate the “job lock” this produces, by making it illegal for insurance companies to deny coverage based on pre-existing conditions. Now you can quit your job to start that business you’ve dreamed of without worrying about whether you can get insurance. But the link between employment and insurance is just one more layer of complication that makes our health care system such an absurd kludge. Which leads to…
A single-payer-plus system would have made this whole thing simpler. Conservatives may roll their eyes and say, “Are you still going on about that?” but it’s something we should indeed keep talking about. The Affordable Care Act brings us to a system that is much better than what we have now, but still far worse than what it could be. I’ll continue to reiterate that we could have a system that satisfies the desires of both liberals and conservatives, insures everyone, and does it without all the layers of complication we suffer through now. If we wanted to, we could transition over time to a system like they have in France, with a basic, government-provided single-payer plan that covers every citizen, combined with a market for supplemental private insurance. That would give us the universal coverage and security liberals like, the ability to buy as much insurance as you want from a private company that conservatives like, and the efficiency and cost savings we all ought to like.
Would that be a big change? Sure. But it’s essentially what America’s seniors already have, and it has been very successful. They have their government plan so there are virtually no uninsured seniors, and they can buy Medigap coverage to give them extra benefits.
The ACA could make it easier to transition to a system where all Americans enjoy the same privilege. The exchange marketplace could be transitioned to become the place everyone buys supplemental insurance. We now have a system where a significant chunk of the population—the elderly and poor—are on government plans, and you could widen their availability in both directions (down in age and up in income) and unify the benefits.
That’s a long-term project, but it could be the next big health-care reform (in 20 years or so). Obviously, the most important priority in the next year or two is implementing the ACA and determining what’s working and what isn’t so it can be tweaked and improved. But we shouldn’t forget about what comes next.
By: Paul Waldman, Contributing Editor, The American Prospect, November 1, 2013
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