Posted by AzBlueMeanie:
Last month there was the economics debunking of the Reinhart-Rogoff thesis, which led to a back and forth argument between traditional economists (Keynesians) and conservative economists. In the end, Reinhart-Rogoff were proved wrong and Paul Krugman proved right. Of course, the conservative economists refused to concede they were wrong. For them it is a matter of faith, not science (which means they should not be taken seriously as economists).
This month, a new economics back and forth argument has developed between economists. Karoli reports Forbes Tells The Truth, Then Lies About Obamacare:
Last week, Forbes blogger Rick Ungar admitted he was wrong about Obamacare and insurance rates, following the news that California's rates were actually less than expected.
For quite some time, I have been predicting that
Obamacare would likely mean higher insurance rates in the individual
market for the “young immortals” and others under the age of 40. At the
same time, my expectation was that those who fall into the older age
ranges would benefit greatly as their premium charges would be lowered
thanks to the Affordable Care Act.It is increasingly clear that I had it wrong.
That must have come as a shock to the Forbes community, so they quickly put Avik Roy, their corporate pharma shill, on the job. His post making the claim that rates double is incredibly disingenuous on a number of levels.
If you’re a 25 year old male non-smoker, buying insurance
for yourself, the cheapest plan on Obamacare’s exchanges is the
catastrophic plan, which costs an average of $184 a month. (By
“average,” I mean the median monthly premium across California’s 19
insurance rating regions.)The next cheapest plan, the “bronze” comprehensive plan, costs $205 a
month. But in 2013, on eHealthInsurance.com (NASDAQ:EHTH), the median
cost of the five cheapest plans was only $92.In other words, for the typical 25-year-old male non-smoking
Californian, Obamacare will drive premiums up by between 100 and 123
percent.Under Obamacare, only people under the age of 30 can participate in
the slightly cheaper catastrophic plan. So if you’re 40, your cheapest
option is the bronze plan. In California, the median price of a bronze
plan for a 40-year-old male non-smoker will be $261.
Ezra Klein debunked Roy's nonsensical and dishonest comparison in The shocking truth about Obamacare’s rate shock:
Here’s the first thing to know: We’re talking about a small fraction
of the American health-care system. This isn’t about people on Medicare
or Medicaid or employer-based insurance. It’s about people joining
Obamacare’s insurance exchanges. That’s people who buy insurance on
their own now, as well as some of the uninsured. In 2014, 7 million
people, or 2.5 percent of the population, is expected to buy insurance through the exchanges. By 2023, that will rise to 24 million people, or 8 percent.
So we’re talking about a small portion of the market. Worse, we’re talking about that small portion of the market all wrong.
Roy got his 146 percent by heading to eHealthInsurance.com, running a
search for insurance plans in California and comparing the cost of the
cheapest plans to the cost of the plans being offered in the exchanges.
That’s not just comparing apples to oranges. It’s comparing apples to
oranges that the fruit guy may not even let you buy.
* * *
According to HealthCare.gov, 14 percent of people who try to buy that
plan are turned away outright. Another 12 percent are told they’ll have
to pay more than $109. So a quarter of the people who try to buy this
insurance product for $109 a month are told they can’t. Those are the
people who need insurance most — they are sick, or were sick, or are
likely to get sick. So, again, is $109 really the price of this plan?
Comparing the pre-underwriting price of this plan to those in
Obamacare’s exchanges is ridiculous. The plans in Obamacare’s exchanges
have to include those people. They can’t turn anyone away or jack up
rates because of a history of arthritis or heart disease.
* * *
Some people will find the new rules make insurance more expensive.
That’s in part because their health insurance was made cheap by turning
away sick people. The new rules also won’t allow for as much
discrimination based on age or gender. The flip side of that, of course,
is that many will suddenly find their health insurance is much cheaper,
or they will find that, for the first time, they’re not turned away
when they try to buy health insurance.
That’s why the law is expected to insure almost 25 million people in
the first decade: It makes health insurance affordable and accessible to
millions who couldn’t get it before. To judge it from a baseline that
leaves them out — a baseline that asks only what the wealthy and healthy
will pay and ignores the benefits to the poor, the sick, the old, and
women — well, that is a bit shocking.
Jonathan Cohn at The New Republic also debunked Roy's nonsensical and dishonest comparison in Anatomy of a Bogus Obamacare Argument How an irresponsible Forbes writer distorted the debate:
If you want to know why we can’t have an honest debate about Obamacare,
all you have to do is pay attention to some recent news from
California—and the way a highly distorted version of it, by one
irresponsible writer, has rippled through the conservative press.
* * *
Insurance bids from eHealthInsurance are for new customers only.
Insurers who sell to individuals—that is, insurers who sell in the
“non-group market”—frequently raise rates dramatically, and
unpredictably, because a particular group of customers have become too
expensive to insure. In other words, if you buy on eHealthInsurance, you
might get a reasonable rate the first year, only to experience
eye-popping increases a year or two later. That won’t happen on the
exchanges, because, under Obamacare, insurers can’t charge different
prices to new and existing customers.
But the most amazing part
of Roy’s entry was what it didn’t say. Roy never acknowledged that, even
as young and healthy people would have to face higher premiums, older
and sicker people would face lower premiums. He said absolutely
nothing—not a single word!—about the federal subsidies available to
people with incomes below 400 percent of the poverty line. (That's about
$46,000 a year for a single adult, or $94,000 for a family of four.)
This has been a pattern with his writing and, unfortunately, much of
what I read on the right. Articles focus on the drawbacks of Obamacare
but almost never acknolwedge the benefits.
* * *
Roy is no dummy. He’s well aware of these facts. He could have
acknowledged them, and went on to make the case that the benefits are
not worth those costs—that it’s fundamentally unfair to ask young,
healthy, affluent people to pay more, or that Obamacare’s whole scheme
is just so inefficient as to make it worse than the alternative.
* * *
But Roy didn’t do that. And while all of us are susceptible to hyperbole
or selective intepretation from time to time, Roy's column was
something else entirely. He plucked out two examples of people who would
pay more in California, pretended they were emblematic of the system as
a whole, then accused other writers of being irresponsible. His
argument hasn't held up well to scrutiny, but it's part of the political
conversation and, I'm sure, will remain so for a while.
Paul Krugman was even harsher in his assessment of Roy, labeling him a fraud. We Are Not Having A Serious Discussion, Obamacare Edition:
The thing you want to bear in mind is that Roy is widely considered a good example of a reformist conservative, not to mention a health policy wonk. So what does this reform-minded wonk have to say about Obamacare?
* * *
So here’s the comparison Roy uses: he points out that the insurance
premiums that will apparently be charged on the California exchange will
be higher than the lowest rates being offered by some insurers in
California right now.
As Klein says, this isn’t just comparing apples and oranges; it’s comparing apples with oranges you can’t even buy.
Right now, California has a basically unregulated individual market,
in which insurers are free to reject whoever they choose, and charge
whatever rates they choose. This means that a few young, healthy people
with no record of prior medical problems can get cheap plans; these are,
of course, precisely the people who need insurance least, and these
plans are cheap not just because they’re only available to the very
healthy but because they don’t provide much insurance. If you’re not
healthy or wealthy enough to get by with this kind of insurance, too
bad.
So looking at these rates tells you nothing at all about the success
of a program that offers insurance to everyone, regardless of medical
history, and sets fairly high minimum standards for the quality of that
insurance.
What’s more, this isn’t some obscure issue. When people try to explain
the logic of ObamaRomneyCare — certainly when I try to explain it — they
often start from precisely this point, pointing out that unregulated
insurance markets give the healthy and wealthy a pretty good deal but
leave everyone else out in the cold, then work from that point toward
the “three-legged stool” of community rating, mandates,and subsidies
that supports reform. So Roy has to know that he’s making an essentially
fraudulent argument — and does it anyway.
* * *
I know that a lot of people wish we lived in a country where debates
about things like health care policy were serious, honest discussions of
debatable points. I like to hope that by the time I retire I’ll
actually live in a country like that. But right now, and surely for
years to come, it’s basically facts versus fraud.
Steve Benen sums it up well, "Credible policy debates are rendered impossible, not because of the
chasm between the two sides, but because only one side places a value on
facts, evidence, and reason." Avik Roy and the wonk gap.
