OP-ED

A Reply to the Cato Institute

This week, the Cato Institute released a 52-page report on health care reform titled: Bad Medicine: A Guide to the Real Costs and Consequences of the New Health Care Law.

The tract was written by Michael Tanner, a senior fellow at the Institute, and it rests on the thesis that the Patient Protection and Affordable Care Act (ACA) is both Unaffordable and Unfair. Inevitably, Tanner’s claims about affordability are shaky; in truth no one can project how much reform will cost over ten years—and how much it will save. There are too many variables involved. Nevertheless, Tanner seems sure: the legislation will add to the deficit, he asserts, and force insurance premiums higher. Moreover, he stamps the legislation “unjust”: it would turn private insurance companies into regulated “public utilities,” forcing them to insure sick people, while “redistributing income” from families earning “over $348,000” to families earning “$18,000 to $55,000.”  Ultimately, he argues, reform represents yet another step toward turning the U.S. into a “Nanny State.”

Why a 52-page report on health care reform now? Tanner makes his purpose clear in the Introduction where he suggests that conservatives will make the new health care legislation the “centerpiece of Republican campaigns this fall,” as they lobby for repealing the Affordable Care Act, or at the very least, replacing it. Bad Medicine is meant to serve as a playbook for those who hope to kill reform.

With that in mind, The Century Foundation decided that the document deserves scrutiny. In the weeks ahead, I will be analyzing and rebutting the report’s many arguments against individual and employer mandates, insurance regulation, subsidies, reductions in Medicare spending, and the CLASS Act, a much-needed national long-term care program.

Cherry-Picking the Polls

To buttress the argument for repeal, the report begins by declaring that the reform “legislation remains deeply unpopular. Recent polls show substantial majorities support repealing it. For example, as a Rasmussen poll in late May showed that 63 percent of likely voters supported repeal, with 46 percent ‘strongly’ supporting repeal. Just 32 percent wanted to keep the law.”

To illustrate the point, page 2 of Bad Medicine features this chart:

Rasmussen Poll –May 22-23

Rasmussen

Source: Rasmussen Reports, poll of 1,000 likely voters, May 22–23, 2010, margin of error +/- 3 percentage points, with a 95% level of confidence.

Some might object that Cato is offering a Rasmussen poll as its only evidence.  Many liberals claim that Rasmussen tilts to the right. Last year, even TIME magazine called Rasmussen a “conservative-leaning polling group.” The Center for Public Integrity points out that Scott Rasmussen, the president of the organization was a paid consultant  for the 2004 George Bush campaign.

Nevertheless, for the moment let’s accept Cato’s use of a Rasmussen survey.  The group’s work is generally recognized as “reliable,” even if, as blogger Nate Silver notes, its “issue-based polling” tends to “elicit responses that are more conservative than those found on other national polls.”

What bothers me is not so much the pollster, but the fact Tanner has reached back to May to find a poll that supports his thesis. Keep in mind that Rasmussen has been asking the question about repealing the healthcare legislation every week since the bill passed in March.  Bad Medicine was released July 12. Why didn’t Tanner include June numbers? Instead, he  hand-picked the one poll, over a seventeen week span, that shows support for repeal running as high as 63%.

In May, Rasmussen commented on the spike: “Support for repeal of the new national health care plan has jumped to its highest level ever. Prior to today, weekly polling had shown support for repeal ranging from 54% to 58%.  . . . this marks the first time that support for repeal has climbed into the 60s. It will be interesting to see whether this marks a brief bounce or indicates a trend of growing opposition.”

Indeed, the May 22 poll turned out to be a “bounce”—merely a blip on the screen. Over the next five weeks, support for repeal consistently dropped, while opposition to killing the bill rose.

Rasmussen Polls on Repeal of Health Care Reform: March –July

Ramussen_July

By late June, as the table above reveals, just 52% of voters favored repeal—down from 63% in that one May poll– while 40% were opposed. The most recent Rasmussen numbers, released Monday, July 15, confirms where public opinion is heading.  As the pollster notes, “This is the second lowest level of support for repeal in 17 weeks of surveying since the health care bill was passed by Congress. It marks what appears to be a continuing downward trend in support for repeal since June.”

The More Americans Learn About the ACA, the Better They Like It

A survey taken at any particular point in time is not terribly meaningful. Trends, on the other hand, tell us where minds are moving. As I have argued in the past, ever since the reform legislation passed Congress on that Sunday evening in March, multiple polls have tracked growing support for the legislation.

Recent polls that go beyond the “favor/oppose’” formula to ask more probing question also have discovered that the public is keeping an open mind. For example, in June, a Kaiser Foundation poll discovered that 60% of Americans either support the ACA or prefer that it “be given a chance to work with Congress making revisions as needed.’” Just 27% favored repeal.

A June NBC/Wall Street Journal poll confirmed the wait-and- see attitude. When pollsters asked: “Would you be more likely to vote for a Democratic candidate for Congress who says we should give the new health care law a chance to work and then make changes to it as needed, or a Republican candidate for Congress who says we should repeal the new health care law entirely and then start over?’” 51% of respondents picked the Democrat, 44% picked the Republican. And as The New Republic’s Jonathan Chait notes, “this was in a poll showing a plurality (45-43) preferring a Republican-controlled Congress.”    Chait adds: “One of the political benefits to Democrats of passing the Affordable Care Act . . . is that it shifted the debate to favorable terrain. Now Democrats are favoring the status quo, and Republicans are trying to pass a radical change.”

Finally, Gallup polling both affirms that the number of Americans who favor the ACA has been climbing over time, and suggests that opposition is now largely confined to the one group that already has universal coverage– seniors.

Image001

The Washington Post’s Ezra Klein comments on the divide: “Health-care reform, as you can see in the table, is comfortably popular with every demographic except for seniors. And seniors, of course, aren’t opposed to government-run health care. They love their Medicare, and insofar as they have a policy concern here, it’s that the Affordable Care Act will interfere with the single-payer system they rely on. The ACA does include some Medicare cuts, and the GOP was extremely effective at messaging on them . . .  But insofar as there’s a policy message here, it’s comforting for health-care reformers. The Affordable Care Act is popular among the people it will actually affect, and unpopular among the people who are worried it will harm the much-more statist health-care system they depend on.”

In the end, whatever polls you look at—Rasmussen’s, Kaiser’s, Gallup’s–and however you slice and dice the numbers, it is very difficult to find evidence for the Cato’s initial claim, on the second page of its report that the “legislation remains deeply unpopular.”

Four months ago, few Americans knew what was in the 2,500 page bill, or what impact it would have on their lives. Uncertainty fueled anxiety. But with each passing week, the public learns more about health care reform. For instance, this week, the administration announced which preventive services insurers will be required to cover, free of charge. The rules will eliminate co-payments, deductibles and other charges for blood pressure, diabetes and cholesterol tests; many cancer screenings including mammograms for women over 40; routine vaccinations; prenatal care;  and vision and hearing tests for children. The more Americans learns about the details of the legislation, and how reform will help them and their families, the better they will like it.

Thus Tanner has his work cut out for him if he hopes to persuade voters that the Patient Protection and Accountable Care Act represents “bad medicine.”  In part 2 of this post, I’ll turn to his contention that individual mandates “violate individual liberties” and will “fall far short of the goal” of bringing “young and healthy individuals into the insurance pool.”

Maggie Mahar is an award winning journalist and author. A frequent contributor to THCB, her work has appeared in the New York Times, Barron’s and Institutional Investor. She is the author of  “Money-Driven Medicine: The Real Reason Why Healthcare Costs So Much,” an examination of the economic forces driving the health care system. A fellow at the Century Foundation, Maggie is also the author the increasingly influential HealthBeat blog, one of our favorite health care reads, where this piece first appeared.

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Guest

Just desire to say your article is as astonishing. The clarity in your post is simply excellent and i could assume you’re an expert on this subject. Fine with your permission let me to grab your feed to keep updated with forthcoming post. Thanks a million and please continue the rewarding work.

John M. Chew
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John M. Chew

1. It does not solve the problem. We never had a health care crisis,we had a health care COST crisis. There may be some things in the bill that address some cost but does not bring down cost effectively because they did not start out working on the true problem. 2. The mandate placed on individual citizens is inherently wrong. Unconstitutional or other wise,it’s unethical to Mandate the purchase especially without bringing the cost down first. see 1. The group of people who will be negatively affected by this the most are the very people tit is supposed to help… Read more »

Peter
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Peter

“Thus private insurance could deliver Medicare for the same, worst case scenerio, or slightly less, maybe 5-10%.” Is that all!? I’d expect at least half for all your defending of private sector insurance. Thanks but I’ll take a public system that has a chance to really give us reductions. Medicare is stuck paying the going rate set by the private sector – which we know is unsustainable. “After you passed Medicare now 19% of seniors are on Medicaid and very few can afford to pay their own medical expenses.” If that’s true (not even close to provable), but funny, that’s… Read more »

Nate
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Nate

“On Nate’s insurance company and how it’s different from other insurers: Nate works for an alternative insurance company in an alternative universe.”
Your most intelligent retort yet Maggie. Hey if you don’t have facts on your side I rather you try humor then just making them up like you usually do.
And FYI I don’t work for I own. There are those of us who actually get out and solve problems, myself, and those of us who stay home and write fiction, thank you for your contribution.

maggiemahar
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margalit & Peter Thanks for your comment We’re no longer making medical breakthroughs that extend overall life expectancy. Relatively inexpensive medications plus lifestyle changes have made death by heart disease rarer, but that just means that you’re more likely to die of cancer–or Alzheimer’s. We are very, very far from anything like a cure for Alzheimers. As palliative care specialist Dr. Diane Meier points out, with all of this “innovation” we are simply “saving” ourselves to die of some form of dementia. In my boomer generatoin, and more people will find that their bodies outlive their minds. There are worse… Read more »

Nate
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Nate

Peter, Maggie, Matt any other liberals here want to argue Medicare saved seniors from dependence like it was claimed to pass Medicare? A central rationale offered to the public for the bills that became Medicare was that they would enable people to “avoid dependence” in old age. In fact it was a bogus rationale that served as a key form of transaction-cost augmentation used to secure the bill’s passage. That this rationale was not believed by the bills’ authors in HEW is clearly indicated by Celebrezze’s acknowledgments above regarding the omission of coverage for catastrophic illness. Nonetheless, government officials’ repeated… Read more »

Nate
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Nate

“7-8K really, for a 65+ year old probably with pre-existing? At what deductible and co-pay?” Peter you really are simple sometimes. What do you think the average spending per Medicare beneficiary is per year? Add admin and retention you have your insurance premium. Private insurance delivers the exact same medicare benefits, there is your second answer, slightly less then Medicare does. They also do it minus the 10% fraud rate. Thus private insurance could deliver Medicare for the same, worst case scenerio, or slightly less, maybe 5-10%. ” Private insurance does what Medicare can’t and that is raise rates by… Read more »

Peter
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Peter

“So instead of getting a subsidized plan at 1200 you would have to pay 7-8K, private insurance does deliver Medicare cheaper then medicare does so it would cost less.” 7-8K really, for a 65+ year old probably with pre-existing? At what deductible and co-pay? And who could afford that on a pension anyway? If I had my way we’d all be on individual plans, single-pay would happen so fast in this market insurance companies wouldn’t know what hit them. Private insurance does what Medicare can’t and that is raise rates by compounded % each year – anybody can do that… Read more »

Nate
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Nate

careful Peter you can’t say things like that on left leaning blogs. Or financial ones either. Medicare taxes are to pay for current enrollee’s Medicare coverage. Paying your Medicare Tax in now way entitles or promises you future benefits. I personally think it should but if it did then uncle sam would have another 100 trillion of debt on his books and be insolvant by all measures. Medicare Part A is free to enrollees, they pay nothoing for it. Medicacre Part B is $90 or what ever current price is. C/MA is usually free, and D varies. A benefit package… Read more »

Peter
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Peter

No Nate, it’s not free, it’s been paid for out of their pay checks and is also paid from their taxes. But I guess that for “free” insureds will accept some hassels dealing with Meducare. The reason they don’t use private insurance is they couldn’t afford the rates even with your assertions that private insurance is so effecient and cost effective. Even during their working life most got their paid for insurance from their employer.

Nate
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Nate

I don’t know Peter maybe it has something to do with them taking away your social security?
Y&ou really need a 10 second rule Peter, think for 10 seconds before you make stupid responces. You will also see if you read that I never once said it was a bad deal for insured. In fact it is an incredible deal at the time you actually become an insured seeing as how you don’t pay for it. Free is always a good deal even when it is wasteful of other people’s money.

Peter
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Peter

I guess if Medicare was such a bad deal for insured as Nate says then they could just pay for and use private insurance. I wonder why 65s+ don’t do that?

Nate
Guest
Nate

United and Anthem can get away with charging $40 PEPM maybe a little more. For what that includes it is still a bargin compared to Medicare. When you actually do the math Medicare spends roughly $23 directly on administration, another $10-$15 indirectly through CMS and other agencies that contribute to its administration and then loses $58 PEPM to fraud. Total that is $91 compared to $40-$50 for private insurance. Private insurance includes far better customer service and websites, disease management, wellness, and many other services that medicare does not. To say that is unnecessary high is just partisian propoganda. Private… Read more »

Margalit Gur-Arie
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Nate, just a general question: are your practices and efficiencies representative of all private insurers, or are they just representative of your company? In other words, should I extrapolate from your $20 overhead to say that UHC’s is the same? And isn’t a TPA somewhat different than actually selling insurance?

Nate
Guest
Nate

“As you well know, cherry-picking is and has continued to be be a problem in the individual market, ”
No I don’t know, I sell insurance and don’t beleive there is cherry picking. Based on what knowledge do you claim there is cherry picking and how do you define cherry picking? If your going to claim charging someone that is sick a higher rate them someone that is healthy then by your defining of the word there is, by normal definition there is not. It is an illegal pratice and hasn’t been around for years.