Tag Archives: health care

by | February 14, 2012 · 9:58 AM

Peter Thiel Fudges Facts on JFK

By Luke Brinker

In his latest Newsweek column, Niall Ferguson extols billionaire PayPal founder and prominent libertarian Peter Thiel as “one of the most interesting and original thinkers in America today.”

Like most libertarians, Thiel’s opposition to big government comes with a “but” appended to it. In Thiel’s case, he supports massive government investment in research and development, which has significantly benefited tech entrepreneurs like Thiel himself. This particular line — which calls Ferguson’s praise for Thiel’s great mind into question — is particularly noteworthy:

However, when it comes to questions about health care, nuclear power, and education, Thiel readily concedes that government has a role to play—just not the one it plays today. As he puts it: “If Einstein sent a letter to the White House today, it would get lost in the mailroom and be treated as a joke. In the late 1960s, Kennedy focused on the space program and didn’t dedicate money to health care. Can you imagine the government doing that today?”

Set aside the fact that JFK was dead in 1963, so he didn’t do anything related to space “in the late 1960s.” What’s most appalling about Thiel’s remark is his suggestion that the 35th president emphasized space at the expense of health care. In fact, JFK pushed for the Medicare program that his vice president and successor, Lyndon Johnson, signed into law in 1965. (Faced with a more conservative Congress than Johnson dealt with, JFK had had difficulty passing much of his domestic program.) As this clip from one a 1962 speech at Madison Square Garden demonstrates, JFK was an impassioned advocate for universal health care:

With all that praise for Europe’s advances in the field of health, the JFK of Madison Square Garden would surely be labelled a radical Marxist by the Tea Party. Perhaps that’s why the right loathed Kennedy when he was in the Oval Office.

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by | January 10, 2012 · 3:53 PM

A Useful Debate on the Welfare State in 2012

 

By Luke Brinker

To hear Willard Mitt Romney tell it, voters face a stark choice in 2012. They can elect either President Barack Obama, whose support of a “European-style social welfare state” pursues “equality of outcome,” or Romney himself, the self-appointed guardian of the “opportunity society” in which people rise based on merit.

(Allow me to digress briefly, simply to point out that it’s awfully rich to have Romney, son of American Motor CEO, Michigan Governor, and Secretary of Housing and Urban Development George Romney, to lecture Barack Obama, son of a single mother who used food stamps, about rising to the top through excellence and hard work. Digression complete.)

Romney’s characterization of Obama’s worldview and the European welfare state is woefully inaccurate.  For one, Obama is not a European-style social democrat. His health care law enshrined the existing for-profit, private health insurance model, while most European countries have either single-payer health care (i.e., the dreaded “socialized medicine”) or not-for-profit health insurance companies (in Germany, for instance). Meanwhile, Obama supports raising the top federal income tax rate from 35 percent to 39.6 percent, the Clinton-era rate. In France, the top income tax rate is 41 percent. It’s 45 percent in Germany, 52 percent in the Netherlands, 56.6 percent in Sweden, and 50 percent in the United Kingdom. (And yes, those nations still have rich people, contrary to Romney’s absurd claim that social welfare states seek “equality of outcome.”) Moreover, all European nations have some form of value-added tax (VAT), something that has yet to be seriously considered by Obama’s or any other administration.

But don’t generous social benefits lead inevitably to high levels of indebtedness, a la Portugal, Italy, Ireland, Greece, and Spain? As Paul Krugman points out, if the welfare state-debt crisis linkage were what conservatives claim it is, we should expect to see debt crises in Germany, Scandinavia, and Canada, all of which have strong safety nets. They also all have robust regulation of financial services, and with the exception of Germany, were prudent enough not to join the shackling euro currency union.

Despite Romney’s willful blindness to facts about Europe and the welfare state, something positive may yet emerge from his line of attack. Though Obama is not a Scandinavian, he does see a vital role for government in allaying gaping social and economic inequalities. That’s what motivates the president’s support for public education, investment in job-creating stimulus programs, a more progressive tax policy, and increased health insurance coverage. A recent New York Times report on declining social mobility in the United States provides an excellent backdrop for the coming debate between Obama and Romney. While Willard and his fellow conservatives see a United States in which the playing field is level and there are no obstacles to individual success, the US stands out among developed countries for having the highest proportion of men (42 percent) staying in the bottom fifth of income after being born into it. It’s no coincidence that the decline in upward mobility occurred in tandem with diminishing political focus on alleviating poverty. Our increasingly money-soaked political culture ensures that the forces of privilege drown out the voices of the disadvantaged. (For more on this, read economist Robert Reich’s Supercapitalism.)

Heading into November, Obama has no choice but to mount a spirited defense of the social safety net. In spite of recent signs of economic progress, unemployment is likely to remain uncomfortably high in Election Day. It’s rare for a president to win re-election with jobless numbers as high as they are now, but it’s happened before. In 1936, amid a 16.9 percent unemployment rate, Franklin Roosevelt soundly defeated Alf Landon. Roosevelt presented voters with a choice between New Deal reform and Landon’s laissez-faire capitalism. He made unambiguous connections between Republican economic policy and the Great Depression in which the nation was mired. A latter-day defense of a strong government role would resemble the words of a Massachusetts politician not named Romney. Here’s CBS’s report on Senate candidate Elizabeth Warren:

Warren rejects the concept that it is possible for Americans to become wealthy in isolation.

“You built a factory out there? Good for you,” she says. “But I want to be clear: you moved your goods to market on the roads the rest of us paid for; you hired workers the rest of us paid to educate; you were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did.”

She continues: “Now look, you built a factory and it turned into something terrific, or a great idea? God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.”

Welfare state supporters are not foes of wealth. Unlike Romney, they may not glorify it as an end in itself or a sign of one’s supreme virtue, but they recognize that in a free society, some will accumulate more than others. It is not this immutable reality with which safety net supporters quibble. Instead, it is with the harsh realities of a society with increasing economic inequality, mass popular disenfranchisement, and decreasing social mobility. Romney has handed the Democrats a golden opportunity to highlight the necessity of a government that works to solve those problems.

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by | January 9, 2012 · 3:37 PM

Voter Stupidity and the 2012 Election

By Luke Brinker

It’s standard fare for politicians to sing paeans to the wise, discerning American public. Like most political platitudes, this one doesn’t withstand a moment’s worth of scrutiny. Put simply, the American people are fickle, irrational, and given to holding wildly inconsistent opinions, as Jacob Wesiberg noted in a 2010 Slate column:

Anybody who says you can’t have it both ways clearly hasn’t been spending much time reading opinion polls lately. One year ago, 59 percent of the American public liked the stimulus plan, according to Gallup. A few months later, with the economy still deeply mired in recession, a majority of the same size said Obama wasspending too much money on it. There’s nothing wrong with changing your mind, of course, but opinion polls over the last year reflect something altogether more troubling: a country that simultaneously demands and rejects action on unemployment, deficits, health care, climate change, and a whole host of other major problems. Sixty percent of Americans want stricter regulations of financial institutions. But nearly the same proportion says we’re suffering from too much regulation on business. That kind of illogic—or, if you prefer, susceptibility to rhetorical manipulation—is what locks the status quo in place.

At the root of this kind of self-contradiction is our historical, nationally characterological ambivalence about government. We want Washington and the states to fix all of our problems now. At the same time, we want government to shrink, spend less, and reduce our taxes. We dislike government in the abstract: According to CNN, 67 percent of people favorbalancing the budget even when the country is in a recession or a war, which is madness. But we love government in the particular: Even larger majorities oppose the kind of spending cuts that would reduce projected deficits, let alone eliminate them. Nearly half the public wants to cancel the Obama stimulus, and a strong majority doesn’t want another round of it. But 80-plus percent of people want to extend unemployment benefits and to spend more money on roads and bridges. There’s another term for that stuff: more stimulus spending.

Then there’s the public’s attitude toward matters of science, which is all too often politicized and is thus relevant for our consideration. A November Pew poll found that a mere 38 percent of Americans acknowledged both that climate change is occurring and that human activity causes it. When it comes to evolution, a plurality of Americans agree with the statement that “God created humans in their present form.” A mere 16 percent hold that there is no supernatural explanation for the development of Homo sapiens.

The latest reminder of voters’ pitiful ignorance comes in an excellent Ron Brownstein column analyzing the populist sentiment that animates the campaign of Rick Santorum:

When Santorum spoke last week in Marshalltown, Iowa, Carlene Illum, a retired credit-union loan officer, cheered his promises to retrench government entitlements for the poor and denounced Obama as “a socialist” for his health care plan. But she blanched at the idea of converting Medicare into a voucher, or premium-support, plan (which Santorum backs) and also recoiled at retrenching Social Security (which he is also urging). “I don’t think Social Security is an entitlement because I paid into it,” she said. “I feel the same way about Medicare.” She’s not alone: In the most recent Allstate/National Journal Heartland Monitor poll, three-fifths of noncollege Republicans opposed converting Medicare into a voucher-like system.

Let’s get this straight: Obama’s health care plan, which enshrines private health insurance as the predominant mode of health care delivery, is “socialist,” but Nobama had better not take away her socialized medicine (Medicare)! (There may well be some measure of “I’ve got mine, good luck to the rest of you getting yours” at work here.) A fair amount of blame for such stupidity can be laid at the feet of demagogic politicians, who have somehow managed to convince a sizable portion of the electorate that Wall Street’s candidate in 2008 is a Marxist. But in a democracy, voters have a responsibility to be well-informed – and that means seeking out news sources besides Glenn Beck, Andrew Breitbart, and Fox News. If Ms. Illum had the time to haul herself to a Santorum rally, she has more than sufficient time to research the Affordable Care Act. She may conclude that she still opposes it, but she’d realize it’s far from socialist. But because ignorance is bliss for committed Tea Party partisans, I doubt anything of the sort will ever occur.

Just remember: We live in a democracy, and these individuals’ votes count just as much as your own.

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by | December 27, 2011 · 11:26 AM

The Necessity of the Individual Mandate

By Luke Brinker

In an ideal world, there would be no need for an individual mandate to purchase private health insurance. That’s because in an ideal world, the United States would discard its inefficient, costly system of for-profit health care. As former Labor Secretary Robert Reich, an economist at the University of California-Berkeley, has argued, Medicare for all (yes, genuinely socialized health care) would insure the entire US population and do a far better job of reining in costs than private insurance.

Of course, we don’t live in an ideal world. It would be convenient to blame Tea Party demagogues crying “death panels!” for our inability to fundamentally transform the American health care system. But during the health care debate of 2009-10, conservative Blue Dog Democrats in the House of Representatives and right-leaning members of the Senate Democratic caucus like Max Baucus and Joe Lieberman did far more to scuttle structural health care reform than Tea Party Republicans. It was at the conservative Democrats’ insistence that lawmakers dropped provisions for a public option and a Medicare buy-in.

The Patient Protection and Affordable Care Act, the law signed by President Barack Obama in the spring of 2010, was far from perfect. It works within the existing for-profit health insurance model. But given the resistance of members of the president’s own party to even giving consumers the choice of a government-administered health plan, it’s unclear how the law could have been made better and still passed Congress. The law, which requires individuals to purchase health insurance or pay a fine, resembles a plan offered by the conservative Heritage Foundation in the early 1990s. That stubborn fact hasn’t stopped Michele Bachmann and Co. from labeling the law a radical “government takeover” of health care. Health reform opponents can’t very well attack most of the individual provisions of the law – free preventive care, the requirement that individuals receive coverage regardless of preexisting conditions, the ability of young adults to stay on their parents’ insurance policies until they reach age 26 – because those provisions are overwhelmingly popular. So opponents go after the individual mandate instead.

In a recent New Republic piece, liberal health policy expert Paul Starr dubbed the individual mandate a “political blunder.” Starr contends that the aims of the mandate – the spreading of risk, the avoidance of free-riders – can be accomplished without the strict mandate that the Affordable Care Act enshrines. Jonathan Cohn summarizes Starr’s alternative – and proceeds to demolish it:

Paul understands and agrees with that basic logic. It’s the specific design of the mandate to which he objects. Under the Affordable Care Act, people with the economic means to pay for health care must obtain insurance or pay a modest fee to the government. (The government subsidizes the purchase for people who can’t afford the full price of a policy; it also exempts people with religious objections to formalized medical care.) Paul suggests that, instead of imposing this requirement, the government could simply have offered everybody a choice: People could opt to refuse insurance, but only if they were willing to relinquish the benefits and protections of the new law for a fixed period of time: For example, they would not be guaranteed coverage if they had pre-existing conditions. (An alternative would be to charge people late-enrollment fees.)

Such a policy, Paul says, would not have raised the same objections, politically or constitutionally. And it might work just as well, he says. As proof, he points to Medicare Parts B and D, the programs that cover outpatient services and prescription drugs. Those programs operate with similarly structured “soft” mandates. (That’s my term, not his.) And while Paul concedes a soft mandate in the Affordable Care Act would not work perfectly, he argues that the mandate already in the law will not be perfect, either. In fact, he says, it’s extremely weak – the financial penalties are small, enforcement is limited to withholding tax rebates – and unlikely to do much good.

It’s true that soft mandates work for the Medicare population. But does that lesson apply to the population that the Affordable Care Act’s mandate targets? There’s good reason to doubt it. Senior citizens are far more likely than younger Americans to anticipate medical risks. They aren’t the ones likely to avoid buying insurance when it’s available to them. Conversely, we do have one example of a hard mandate at work in the U.S. It comes from Massachusetts, which imposed a similar requirement as part of the reforms Mitt Romney signed while governor. The Massachusetts system has reduced the state’s uninsurance rate from around 10 percent to around 3 percent (or less, depending on which estimate you believe).

Cohn’s critique would apply to Republican proposals for a “free market” approach to health reform. David Fahrenthold of the Washington Post notes that since the passage of “Obamacare,” they haven’t done much to illuminate what the “replace” part of “repeal and replace” entails. But one much-ballyhooed plan, supported by John McCain during his 2008 White House bid, calls for a carrot-based approach: individuals would receive tax credits to buy insurance. Depending on the generosity of the credit, older people may well find it advantageous, but invincible young adults would not.

The individual mandate may make good policy sense in the context of a private insurance-based health care system, but that won’t much matter if the Supreme Court invalidates it in June. But if it’s disingenuous for conservatives who once embraced the individual mandate to now deride it as paving the path for totalitarianism, the legal arguments against the mandate’s constitutionality are equally opportunistic. Consider Sen. Chuck Grassley of Iowa, who championed the mandate before Obamacare’s passage but signed a congressional letter petitioning the Supreme Court to overturn it on constitutional grounds. Conservatives who aren’t seeking electoral advantage, like President Reagan’s Solicitor General Charles Fried and Reagan-appointed federal appeals judge Laurence Silbermann, defend the constitutionality of the individual mandate. Because certifiable conservatives like Fried and Silbermann uphold the mandate’s constitutionality, it’s not hard to envision swing-voting Justice Anthony Kennedy securing a pro-mandate majority on the Supreme Court. Slate’s Dahlia Lithwick speculates that even Chief Justice John Roberts could rule in favor of the mandate. Whatever decision the high court hands down next summer, the mandate will remain essential to making the health insurance market work.

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by | December 20, 2011 · 12:43 PM

Politifact’s Shaky Command of Facts

By Luke Brinker

The controversy surrounding Politifact’s ridiculous selection for its “Lie of the Year” illuminates the intellectual bankruptcy of the mainstream media’s cult of balance.

According to Politifact’s high priests of truth, Democratic claims that Rep. Paul Ryan’s Medicare plan would “end Medicare as we know it” are egregious distortions of reality. But under the Ryan plan, Medicare would cease to exist as a public insurance program in 2022. Given that Medicare has been a single-payer program since its creation in 1965, any objective observer would conclude that such a proposal would indeed end Medicare “as we know it.” Alas, while Politifact promotes itself as a defender of plain facts, regardless of partisanship or ideology, it betrays its allegiance to Peter G. Peterson Foundation-style deficit hawkery, as Jonathan Chait notes:

oes the Republican plan indeed end Medicare? I would argue yes. But it’s obviously a question of interpretation, not fact. And the whole problem with Politifact’s “Lie of the Year” is that it doesn’t grasp this distinction. Politifact doesn’t even seem to understand the criteria for judging whether a claim is a question of opinion or a question of fact, let alone whether it is true. The item explaining this year’s choice largely consists of irrelevant filler. For instance, Politifact quotes a worried budget scold:

“In terms of creating a national conversation about fiscal reform, the last thing we need is demagoguing attacks against people who have put forward serious policy proposals,” said Jason Peuquet, a policy analyst with the bipartisan Committee for a Responsible Federal Budget. “It’s very worrying.”

Yes, if your agenda is to encourage politicians to propose deficit reduction, then you’ll be worried about any criticism of any deficit reduction proposal, accurate or otherwise. So what? (Matthew Yglesias further parses Politifact’s incredibly weak explanation.)

Of course, deficit alarmists are Very Serious People committed to the future of the republic, and we aren’t supposed to point out that their social program-slashing agenda is, at its core, an ideological proposition. The problem is that the Ryan plan would do nothing to rein in health costs, which drive long-term deficits. As Politifact asserts, something called “Medicare” would still exist under the Ryan plan. However, it wouldn’t be Medicare as it’s existed for nearly half a century and would instead give seniors vouchers with which to purchase private health insurance plans. Health care expert and physician Ezekiel Emanuel, who knows a thing or two about these issues, points out that the Ryan plan shifts costs, but doesn’t reduce them:

Premium support is classic cost shifting, rather than cost cutting. Unless growth in health care costs is low, Medicare beneficiaries will just have to pick up the difference between the voucher’s value and the cost of the health insurance plan they purchase. In fact, the original Ryan plan would have increased out-of-pocket costs for older people by more than $6,000 in 2022. And we can’t depend on competition to bring costs down. Competition among insurance companies in general has not lowered them — in fact, from 1970 through 2009, Medicare spending per beneficiary grew at a slower rate than that of private health insurance.

Many premium support plans contain a spending cap meant to check the growth of Medicare. But whether this works depends upon a very technical — but essential — point: How fast will the amount of the premium support grow? Will it grow with inflation? With gross domestic product? With overall health care spending? When they say the “devil is in the details” this is what they mean. Under the Rivlin-Domenici plan, the value of the voucher would be capped at the rate of overall economic growth plus one percentage point — less than health care inflation has historically been. The Wyden-Ryan plan replaces the voucher cap with an overall cap on Medicare spending using the same target. Excess spending would prompt cuts to doctors and other providers, or an increase in payments by wealthier Medicare beneficiaries.

Moreover, as Paul Krugman demonstrates, Medicare is far superior to private insurance when it comes to reining in costs:

The idea of Medicare as a money-saving program may seem hard to grasp. After all, hasn’t Medicare spending risen dramatically over time? Yes, it has: adjusting for overall inflation, Medicare spending per beneficiary rose more than 400 percent from 1969 to 2009.

But inflation-adjusted premiums on private health insurance rose more than 700 percent over the same period. So while it’s true that Medicare has done an inadequate job of controlling costs, the private sector has done much worse. And if we deny Medicare to 65- and 66-year-olds, we’ll be forcing them to get private insurance — if they can — that will cost much more than it would have cost to provide the same coverage through Medicare.

By the way, we have direct evidence about the higher costs of private insurance via the Medicare Advantage program, which allows Medicare beneficiaries to get their coverage through the private sector. This was supposed to save money; in fact, the program costs taxpayers substantially more per beneficiary than traditional Medicare.

Facts, as John Adams said, are stubborn things. Ironically, they seem to be Politifact’s biggest enemy today.

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