Friday, July 13, 2012

Scott Walker's ACA Op-Ed and Lazy Mendacity

Politicians spin. They tell the best version of the story they can. That’s pretty normal, and reasonably healthy. What we’ve been seeing lately from many Republicans, however, is a sort of casual, sloppy dishonesty that just seems indifferent to, well, the truth.

So: Governor ScottWalker had an op-ed in the Washington Post that painted a devastating picture of the effects the Affordable Care Act would have on his state of Wisconsin, based on a study which he said was commissioned by his Democratic predecessor. Fortunately, he provided a link to the study – and it doesn’t say what he claims it said.

For example. Walker includes the study’s finding that “59 percent of people who buy their own health insurance will experience an average premium increase of 31 percent.” That is, in fact, what the study says. But it also says – and Walker omits – that the other 41 percent will receive a premium decrease averaging 56 percent. The full picture of the individual market isn’t a disaster, as Walker implies, but a mixed picture, with more “losers” than “winners,” but with bigger gains from the average winner than from the average loser. It may or may not be good policy, but it’s hardly an obvious disaster for the state.
Similarly, Walker writes that “For those who are covered by the small-employer group market, the average premium increase will be 15 percent.” That’s highly misleading. In fact, what the study says that 53 percent of those in that group market will have that 15 percent increase, while the other 47 percent will average a 16 percent decrease.

What else? Walker that “150,000 people will stop buying health insurance in the private sector and will instead become dependent on the government and taxpayers.” That’s at best a highly contentious reading of the study’s conclusion that 150,000 people will move from the traditional individual market to the new exchanges. After all, while the exchanges will be government run – here’s what the Massachusetts one set up by Romneycare looks like – the insurance bought on those exchanges will be just as “private sector” as the individual market that’s being phased out. Yes, the insurance companies will be far more heavily regulated – so that they can’t exclude anyone for pre-existing conditions, or cancel their policy, and they’ll have to spend most of their premiums on care – but it’s still private sector insurance.  Those regulations, and the tax credits available for modest-income families, are what Walker is calling “dependent on government.” Of course, insurance was already regulated, so there’s nothing there in principle that’s any different, and I doubt that Walker considers other tax credits to amount to dependence on government.

At least that one is based on something in the report he cites. I’m at a loss for how he comes up with “Approximately 122,000 parents, caretakers and pregnant women with an income of more than 133 percent of the federal poverty level will no longer be eligible for Medicaid.” I searched the study, but came up empty for "parents" or "caretakers" or "pregnant." Even tried some synonyms, no luck. As for the 122K number: that does show up once, but it's about the remaining uninsured, not people kicked off Medicaid. If Walker is correct about this one, and that may be the case, it's not in the report he cites -- and presumably all that would happen to people in that category would be they would shift from Medicaid to subsidized plans in the exchange, so it's not clear they would be worse off.

I also can't speak to Walker's claims about the effect on "Wisconsin taxpayers." The numbers he cites don't appear in the report, although it's certainly possible he's calculating something based on the report's numbers. If so, it can't be found through the report's references to taxes.

I should mention somewhere here: all this is on top of absolutely ignoring the report's key finding that two-thirds of Wisconsin's unemployed -- 340,000 people -- will move from uninsured to insured. Perhaps that's not something that the Governor of Wisconsin thinks is a priority, but I suspect many of those 340,000 do.

Getting back to the numbers that really come from the study: look, it's absolutely true that especially in the short run there are winners and losers with the Affordable Care Act. Because the law (as the study Walker cites says) moves insurers generally from setting premiums based on individual risks and towards charging against group risks, those who have more immediate health risks will be short-term winners, and those who don't are short-term losers. There's also going to be some disruption; some people might not like that, even if they wind up preferring the new to the old: transition costs count, too. And there's nothing wrong with arguing over the law on that basis, although that static analysis misses plenty of arguments for reform (such as, for example, the advantage in knowing that if you move into a risky category at some point in your life -- or if someone in your family does -- that you'll have some financial protection.

But that, of course, isn't what Walker is doing in this column; he's simply pulling out the bad numbers in a report that presents a very balanced picture.

The real question this suggests is: what's the point? I think the answer to this is a kind of lazy mendacity that the Republican partisan press encourages. If falsehoods such as the apology tour, or Obama's rejection of American exceptionalism, or ACA myths such as the 16K IRS agents and 10/6 are permanent fixtures once they get picked up by the Republican network, and nothing can be done to dislodge them, then there's a major incentive for ambitious politicians to concoct their own. And, hey, look, it's backed up (well, some of it, and only if you don't look hard at all) by a real report!

Of course, a politician who really cares about the substance of the issue will try to learn the actual facts, and a politician who cares about engaging in a debate will avoid spewing garbage that's easy for anyone who bothers to look to knock down. But it's a lot easier to just feed the machine -- the better to get your own gig on Fox News or your own radio show or your own quick and easy bestseller somewhere down the road. I promise that telling a few whoppers and getting called on it isn't going to detract from those goals.


  1. I think there's something to this, but I also think there's a sense in which Walker isn't just trying to pull a fast one but cites only the numbers he does because it genuinely reflects where the party and his audience are ideologically. In other words, the gain that some people get can't be measured against the loss that others experience because the loss is what really truly counts. If 90% saw a decrease in premiums, it wouldn't make up for the tragedy of 10% seeing an increase.

    Maybe this has something to do with the psychology of loss aversion and all that, or maybe it's that conservatives tend to value incumbency in a broad sense. I think this, combined with the status quo bias on our political system, makes solving problems like 40 million uninsured such a hurdle. It sucks, but it seems like the focus in policy reform is always gonna be placed more on the losers than the winners. It's as if they are assumed to be entitled to the thing that they already have, whereas the winners are rarely viewed as having much of a claim to the thing that they could possibly get.

    Anyhow, don't know if you're eligible for Catches of the Day, but I think this post should qualify!

  2. This post starts with three observations:

    1) Politicians spin
    2) They tell the best version they can
    3) This is healthy

    The post then proceeds to eviscerate an ACA column anchored on the indisputably accurate observation that "Obamacare will increase the cost of health care for most Wisconsin residents", and rather than describing this as "spin" or "telling the best version one can", in this case we have "lazy mendacity", which is - unmistakeably - very unhealthy.

    If I didn't know better, I might suspect that modern liberalism in the US is careening toward a crisis on January 1, 2014, when a majority of its well-heeled proponents come to discover how much their greatest legislative dream sucks for them personally.

    Until then, commence with the defense mechanisms.

    1. You don't have a job, do you, CSH?

    2. CSH,

      It's not actually clear that it will increase the cost for "most" WI residents.

      Regardless. There are IMO two big questions. One is whether the cost controls actually do some good. If so, that's probably marginally bad for a lot of health care providers, but good for everyone else.

      The other is, regardless of whether there are more immediate winners or losers, whether people with OK insurance now think it's a good idea to pay a bit more to be basically certain that health insurance isn't going to be a problem ever, no matter what happens to your (and your families) health, careers, and finances.

      IMO, that's even a remotely close call. In fact, I'd bet that if you gave healthy people with good insurance exactly that option that many -- maybe most -- would jump on it. Granted, I don't know that for sure, but I think they would. If that's correct, then it may (depending on the cost shift) be a good deal even ignoring the benefits for the currently under or uninsured.

    3. One other thing:

      In real life, for those with employer-linked insurance there are increases in premiums all the time, not to mention dropped coverage, and switched coverage. People may very well associate whatever happens this year, next year, in 2014, or later with ACA, but in reality we won't ever know about the relationship between reform and any specific change, and it will be difficult (and contested) to figure out overall what happened because of ACA.

    4. The majority? Well if most companies drop their plans and if ... sigh. Yeah, change is in the works, one way or another. But that is unavoidable. The present system is untenable and Republicans have no real plans good or bad -- although poor Ross Douthat is eating feces sandwiches over at the NYT and bravely trying to keep a happy face making arguments one suspects he does not even halfway believe (a retreat from universality is actually a moral good -- really Ross?).

      So, it seems it is either the ACA or nothing. Given that choice, being terrified of the ACA is kind of like being terrified of death -- it's understandable, but not going to change what has to happen. I agree that many liberals will be surprised by the ACA in a bad way. That is life - it's always finding a way to bite off your buttocks. Actually, I suspect the GOP may yet manage to can the whole thing.

      But that only kicks the problem not very far down the road. The change is coming, whether or not anyone wants it or welcomes it or is ready for it. Buttocks will be bitten, policies rewritten, etc,etc. If it is not ACA, it will be something else, but trying to resist it is like screaming at the tide. So yeah, it will be bad. Yeah, health care is going to be rationed, that is just the fact. Yeah, the middle class (or the white or the successful) are going to pay for everyone else sooner or later.

      None of which alters the basic mendacity of politics or the various problems of American culture. But fear about things that cannot be avoided doesn't help anything, either. Yes, there are going to be a lot of angry people. But that is just one of those bad things. Everyone is going to die someday, too -- after discovering that most everything they have loved and depended on has failed them in their hour of crisis. It will most likely hurt too -- a lot. Life just sucks that way.

    5. My job is to antagonize the readers of this blog!

    6. So I didn't see Jonathan and Anastasios' comments: first, fair enough on the "most" thing, chalk it up to hyperbole, case #1,000,000 for me. You know what's also weird about that report? Why would Republican stalwart Scott Walker's Administration contract with noted liberal Jonathan Gruber to estimate the ACA impacts in Wisconsin? Gruber, after all, was famously responsible for the shift from Romney's "catastrophic-only" mandate in Massachusetts to Deval Patrick's "comprehensive" mandate - which was not only more expensive than Romney's, but also, in combination with the limit of 3:1 premium ratio between elderly and the young (even though old folks consume 6X the healthcare of the young) ended up driving a lot of young people out of the Massachusetts market?

      I'm going to the bottom of the thread with my theory -

    7. The report was commissioned by the outgoing governor before Walker.

    8. My bad. So where I said "contract" below, substitute "promote". Does change the argument a bit, though it seems to me the underlying question about Walker's motives remains.

    9. I can't read minds, but: maybe they had a report handy and decided to skim through it for numbers that sounded bad and they weren't very careful about it?

      Best not to overthink these things.

  3. What person who makes more than 133% of the federal poverty level is currently on Medicaid?

    1. In many states, you can't even have over $1000 in an IRA if you are trying to qualify for Medicaid.

  4. Ok, I didn't actually read Walker's thing, but I am trying to look at the report a bit, and question:

    Why all the focus on the individual market? It's only like 180,000 people in the whole state, according to the report. The small employer group market is pretty small as well--330,000 people. Conversely, Large Group Employer Supported Insurance covers 2,880,000 people. And the study--which was by Gruber, FWIW, who some people think of as excessively tied to the ACA--as far as I can tell says that the Large Group market will see a premium decrease or no change at all.

    Why all the focus on less than one-tenth of the total (non-elderly) population?

    1. Er, less than one-tenth of the total population. But I'm not the only one with some math problems!

      "Those between 19 and 29 years old who have individual insurance will experience an average premium increase of $1,631 per year. A family of four that does not qualify for a subsidy can expect a 28 percentincrease — from $8,528 to $10,912. For those who are covered by the small-employer group market, the average premium increase will be 15 percent."

      The only time "1,631" appears in the report is as the description of premiums before reform for that age cohort. After reform, the report says, it'll be $2,178. That's an increase of $547--not $1,631! This is on page 24. He gives the correct figures for the family of 4+--but again, this is all out of the tiny individual market.

      Again, I'm no accountant, so am I missing something?

  5. While I agree with much of what folks like Avik Roy (at Forbes) write about the astonishingly poor construction of the ACA, I'm also with Anastasios: had to do something. To the poor construction, and my hypothetical above - might Walker's administration contract with Gruber to achieve plausible deniability in case the whole thing blows up, thus (human suffering aside) allowing Walker to claim he never knew what might happen (when he's not saying "oh those damn liberals!", of course)?

    At the top of page 14 of Gruber's study, in section 3.3, he outlines his prediction for the future of "Employer-Sponsored Insurance". Some folks, like at McKinsey (and crazy anonymous blog commenters such as yours truly) think the share of employer-sponsored insurance will plummet, but Gruber sees a decline of less than 1%. The reasons are, shall we say, quite interesting.

    Gruber's first reason is, well, cause there's a penalty. True, big corporate America has to pay $2,000/employee to save around $10,000/employee. Gruber calls that a "penalty"; in large corporate America they more commonly refer to such a thing as a "productive investment". But whatever. Its the second explanation that's priceless.

    The other reason why there won't be much dumping, from the Wisconsin Department of Health Services within the administration of one Scott Walker, is: because employees won't take it. They won't take it! They'll put on their DFH bandannas, and they'll gather in the city square, all mobilized and organized and unionized and stuff, and chant "Hell no we won't go to the exchange!". That is, of course, unless they have the misfortune of living in the state of old Governor-What's-His-Name who banned all such activity.

    In summary, perhaps Governor Scott Walker's Administration published the attached report without believing much of it, but just looking to cover their asses and generate plausible deniability (and access to finger-pointing against liberals) in case the whole ACA thing blows up.

    On the other hand, maybe Governor Walker really believes that activism and organization is truly the mechanism by which the common worker, speaking with one voice, will rise up and throw off the shackles of corporate abuse, thus putting an end to the otherwise great corporate temptation of mass dumping of health care cost burdens.

    Maybe Walker believes that. Maybe he really does. You'd have to ask him. Bet that would be an interesting conversation.


Note: Only a member of this blog may post a comment.

Who links to my website?