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Five Obamacare ‘Myths’? Debunking Bill Keller’s NYT Debunking

President Obama, Vice President Biden, and senior staff react to the passage of the Affordable Care Act on March 21, 2010 (Pete Souza)

President Obama, Vice President Biden, and senior staff react to the passage of the Affordable Care Act on March 21, 2010 (Pete Souza)

Bill Keller in a New York Times op-ed this week sets out to debunk “Five Obamacare Myths”, but fails miserably in his effort to correct supposed falsehoods about the Patient Protection and Affordable Care Act (ACA). He ironically writes that “a number of fallacies seem to be congealing into accepted wisdom” about the law, calls for “a reality-based discussion”, and then proceeds to “unpack a few of the most persistent myths.”

The first “myth” he sets out to “unpack” is that “OBAMACARE IS A JOB-KILLER”. Some of the “scare stories”, Keller writes, “are based on a deliberate misreading of a Congressional Budget Office report”. One needn’t delve too much further into his attempts to deny that the ACA would kill jobs. One may simply follow his suggestion to “read what the CBO actually wrote”—good advice that he apparently did not follow himself. Turning to the report itself, one finds that the CBO stated explicitly that “the legislation, on net, will reduce the amount of labor used in the economy by a small amount”. Had Keller argued that the label “job-killer” was exaggerated and overly sensationalist would have been one thing, but his attempt to deny the fact that the CBO did estimate that the ACA would, on the whole, kill jobs is quite another.

Keller focuses on the fact that the CBO said some provisions of the ACA would encourage people to work more, but chooses to ignore the fact that it nevertheless also stated that “on net” more jobs would be lost than gained, since other provisions would encourage them to work less, and still others would result in businesses employing fewer full-time workers. As the CBO explained, since employers with 50 or more employees would be required to either insure their workers or pay a penalty, they would be likely to either (a) reduce wages; or (b), if they couldn’t reduce wages enough to pass their increased business costs on to their employees due to minimum wage laws, hire fewer workers; or (c), hire more part-time rather than full-time employees.

Keller attempts to put a positive spin on this by saying that such workers “may choose to retire earlier or work part time”. Of course, if workers rather desired to actually work full-time to make a living, this would not be so much a choice as an uncomfortable reality they would be forced to accept as a consequence of the ACA. In a further attempt to spin the CBO’s conclusions, Keller adds the nonsensical remark that “Those jobs would then be open for others who need them.” It is difficult to imagine what he could possibly have been thinking in making this assertion, given the actual reasons for why such workers would be forced into early retirement or part-time work in the first place (of course, this statement could be easily explained if he never actually read the CBO report).

Having thus dismissed the CBO’s estimate that the ACA would result in a net job loss, Keller opines that it “could be a tonic for the economy.” To support his opinion, he says that the ACA “aims to slow the raging growth of health care costs”. He thus tacitly admits that the law does not aim to actually reduce health care costs, such as by actually addressing the root causes of the rising costs. On the contrary, it rather merely attempts to shift the costs from one party to another.

The Supreme Court, for example, in its fatally flawed ruling that the ACA’s individual mandate to purchase insurance is constitutional, rightly pointed out that “The mandate primarily affects healthy, often young adults who are less likely to need significant health care and have other priorities for spending their money. It is precisely because these individuals, as an actuarial class, incur relatively low health care costs that the mandate helps counter the effect of forcing insurance companies to cover others who impose greater costs than their premiums are allowed to reflect.” In other words, the purpose of the mandate is to force healthy individuals to subsidize the costs of insurance for unhealthy individuals.

And the reason this cost-shifting provision was required in the first place, as the Court also observed, was because, even though the ACA aimed “to increase the number of Americans covered by health insurance and decrease the cost of health care”, the actual reforms of the ACA—forcing insurance providers to accept people with pre-existing conditions and to charge equal rates for those who require a lot of health care as those who require little to none—would in fact “sharply exacerbate” these problems “by providing an incentive for individuals to delay purchasing health insurance until they become sick”, which would in turn “lead insurers to significantly increase premiums on everyone.” As the Court noted, “The individual mandate was Congress’s solution to these problems” that Congress created in the first place.

Returning to Keller’s opinion that the ACA “could be a tonic for the economy” by slowing “the raging growth of health care costs”, he cites a study from the Commonwealth Fund, where one may find an instructive example of what he means. The study offered a 2010 baseline estimate of $13,305 for annual family premiums, which would increase to $21,458 by 2019 without the ACA reforms. With the reforms, the study estimated, the costs would increase to $19,490—a 46% compared to 61% increase in the cost of providing insurance for one’s family by the end of the decade. This is, of course, assuming the study’s assumptions are correct. As the authors point out, their forecast differs from the CBO and other estimates, and “for every study that shows savings from baseline, there is another study that does not.”

The one thing every study seems to agree on, therefore, is that the ACA will do nothing to actually reduce the costs of health care.

We come to Keller’s second “myth”: “OBAMACARE IS A FEDERAL TAKEOVER OF HEALTH INSURANCE”. This, he says, is a “lie”. “The main thing the law does”, he observes, “is deliver 30 million new customers to the private insurance industry.” Indeed. The trouble with this debunking is that it appears to be a strawman argument. He provides not a single example of anyone who has claimed that the ACA is a federal “takeover” of health insurance in the sense that it would nationalize the industry.

His third “myth” is that “THE UNFETTERED MARKETPLACE IS A BETTER SOLUTION”. In other words, according to Keller, it is a “myth” that the free market could offer a better solution to the problems with the existing health care system than the government can. But what if the problems that currently exist are largely because of government attempts to manage the system and lack of a free market? If this were so, would it make sense to say that the solution is even more government interference? Isn’t it an odd coincidence that in industries where a free market exists, even though the quality of goods continually increases, prices tend to decline over time (e.g., computers and other electronic goods), while in those where the government steps in and tries to manage things, costs just get more and more expensive (e.g., health care, college educations, housing, etc.)?

The crux of Keller’s argument is that he is “deeply suspicious of the claim that a health care system dominated by powerful vested interests and mystifying in its complexity can be tamed by consumers who are strapped for time, often poor, sometimes uneducated, confused and afraid.” In other words, Americans aren’t capable of taking care of themselves or making wise choices for their own benefit, and thus need the government to step in and tell them what is best for them and protect them from the “powerful vested interests” that seek to take advantage of them.

One would think that any claim of having debunked a “myth” should rest in proving that that a claim is false. Keller, of course, is here doing nothing of the sort, but merely asserting his own ideological point of view. One could just as well contrarily express a deep suspicion of the claim that a health care system forced on the public by a government in bed with these same “powerful vested interests” could possibly be better than allowing a free market to function. Big Pharma heavily lobbied to ensure that its interests were protected in the ACA, for example, and the financial incentive of the insurance companies whose services people will be forced to buy under the law is to see that people are provided with the least amount of care.

How is this better than a system in which the incentive of health care providers would be to compete to provide the best possible care for the lowest possible cost? How is it better for a health care provider’s client to be a third-party payer whose financial incentive is opposed to the interests of the patient, rather than for the client to be patients themselves? How is it better to further eliminate this doctor-patient relationship? How is it better to tell individuals what options are available and to limit those options, rather than to allow individuals to shop around for themselves and choose from a wider variety of possibilities? How is it better to keep individuals out of the business of their own health, rather than to have a system where the incentive is for individuals to actually educate themselves to make their own informed choices on such matters as the health consequences of their lifestyle choices, preventive care, available treatments, insurance options, etc.?

Keller rejects outright the idea that if individuals were able to interact in a free market for health care that “they will do a better job than government at finding the services … that fit their needs.” The underlying assumptions are that legislators who have only a pretense of knowledge about a complex system and who are easily corrupted under the influence of corporate lobbies know better than individuals how those individuals’ money should best be spent, and that government bureaucrats know better than the free market pricing system how to most efficiently direct scarce resources to the most productive ends. He ironically supports government interference that attempts to eliminate any semblance of a free market in health care, despite professing in this same op-ed to be “a pretty devout capitalist”.

To show that Keller here has not debunked any “myth” at all, it is enough to point out that there are plenty of reasons to be “deeply suspicious”, to borrow his way of putting it, of the assumptions underlying his claim that the health care system as it exists and will exist under the ACA is and will be a better system than the free market could provide if only the bureaucrats would get out of the way.

Keller’s fourth “myth” is the belief that we should “LEAVE IT TO THE STATES. THEY’LL FIX IT”. His argument here is similar to the one he employed for “myth” number three. It depends upon the assumption that the federal government knows better than the state governments what is best for the residents of those individual states.

He offers as an example the health care reform enacted in Massachusetts under governor Mitt Romney, which served largely as the model for the ACA. “You’ve heard a lot about the Massachusetts law”, he writes. “You may not have heard about the seven other states that passed laws requiring insurers to offer coverage to all. They were dismal failures because they failed to mandate that everyone, including the young and healthy, buy in.” Notice that Keller’s criticism is that these states failed to force everyone to buy insurance, not that these states’ legislatures got into their heads the foolish idea that they should force insurance providers to provide coverage to everyone in the first place. How about the 42 other states that didn’t act so foolishly in the first place? Keller doesn’t mention them.

As already noted, the obvious consequence of such legislation would be to provide people with an incentive not to buy insurance until they actually needed it, which would force insurance companies to increase premiums on everybody. Imagine the effect on companies offering fire insurance if they were forced by law to provide insurance to people after their homes had burned down. This would obviously defeat the whole purpose of insurance and either immediately put providers out of business or force them to raise premiums on anyone foolish enough to actually purchase a policy before such an unexpected catastrophe occurred. Keller’s criticism is essentially that these state legislatures were not wise enough to see that the solution to this problem they themselves created would be to force healthy individuals, such as those who eat a healthful diet and exercise, to subsidize the health care costs of unhealthy individuals, including those who eat a Standard American Diet (SAD), smoke, sit around watching TV in their free time, etc., etc.

State legislatures make mistakes, Keller rightly argues. But does not also the federal government? It is enough to counter that if mistakes are to be made, it would be better to have them made more locally, thus limiting the damage, rather than forcing the same mistakes on every state in the Union regardless of the greater wisdom of their own legislators, who otherwise might not so err in their ways, and regardless of the wishes of their constituents, who might otherwise choose to be at liberty to decide for themselves what is in their own best interests, thank you very much.

Keller’s final myth is that “OBAMA IS A LOSER. RUN AGAINST IT, RUN FROM IT, BUT FOR HEAVEN’S SAKE DON’T RUN ON IT”, which doesn’t really address any real issue regarding the ACA at all, but merely criticizes Mitt Romney for opposing Obamacare while having implemented Romneycare in Massachusetts. Well, certainly, he might have a legitimate criticism of Romney as being a hypocrite, but given that Keller doesn’t actually attempt to debunk any “myth” here at all, we may wrap up and point out, in conclusion, that, despite his op-ed’s title, Bill Keller doesn’t leave his readers any more well informed about the facts of the matter after reading it than they were beforehand; but rather, arguably, quite less so.

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About the Author

Jeremy R. Hammond

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Jeremy R. Hammond
Jeremy R. Hammond is an independent political analyst and a recipient of the Project Censored Award for Outstanding Investigative Journalism. He is the founding editor of Foreign Policy Journal and the author of Ron Paul vs. Paul Krugman: Austrian vs. Keynesian economics in the financial crisis and The Rejection of Palestinian Self-Determination: The Struggle for Palestine and the Roots of the Israeli-Arab Conflict. His forthcoming book is on the contemporary U.S. role in the Israeli-Palestinian conflict. 
  • Richard

    On “Obamacare is a federal takeover of health insurance,” I think you’re doing a disservice by overlooking the things people rightfully claim are being taken over by the federal government through Obamacare. For example, Obamacare undeniably does assign power to the federal government to define minimum acceptable coverage for insurance and forbids any cheaper insurance options covering less. Obamacare also does not primarily add 30 million people to private insurance, as 16 million of that estimate is from the expansion of Medicaid.

    I suppose you might not have been able to write an article long enough to cover every lie in the NYT article, but those seem to be huge enough to be worth a quick mention.

    • http://www.jeremyrhammond.com Jeremy R. Hammond

      Yes. But there is a great difference between interfering in the market and taking over the market in the sense of nationalization. The point I was making is that people rightly point out the former, but nobody argues the latter. This is a strawman argument. That was all I felt needed saying, and getting into all the ways the government is interfering in the market through the ACA would be tangential to that point and also take considerable more time (that I don’t have) and space in the article.

  • Mark Frederick

    The efficacy of unfettered market place in regard to health care is indeed a myth, if not for the reasons cited by Keller.

    The Republicans simply will not, or more precisely, dare not, create the conditions required for a completely free and unfettered market place.

    To do so will resume, if not expand, insurance companies ability to deny coverage for pre-existing conditions,placing caps on pay outs and coverage duration and other unpopular practices.

    A free and unfettered market place will demand reducing state powers to truly open the states to any and all competition. It will require reigning in positive state based initiatives as well as the not so positive state based special interest deals.

    That just wont happen.

    Republicans in DC will give in to their baser instincts and carve out special exemptions and rules for favoured companies ( in their state or district) and big national contributors. The Republican controlled state legislatures will do the same. The open borders touted by the GOP will be diluted and riddled with restrictions and set asides negating any benefit.

    Finally there is the matter of perception.

    The Republicans do a great disservice to the concept of market forces improving health care by claiming the conditions existing in the health insurance industry prior to ACA were a free market. Nothing could be further from the truth.

    Without a commitment,discipline and political will to establish a true free market, the ACA is as good as the current system or the one that will replace it if repealed.

    • http://www.jeremyrhammond.com Jeremy R. Hammond

      Mark, why do you think it is a good idea to force insurance companies to cover people with pre-existing conditions? Should companies that offer fire insurance be made to insure people after their house has burned down? Is this a rational solution to the problem of people being able to afford insurance, but not health care? Doesn’t it defeat the whole point of “insurance”? Why are health care costs actually so high in the first place? Forcing insurance companies to take on more costs doesn’t actually address the root problem, which is the lack of a free market in health care. In a free market, as I noted in the article, competition would incentivize health care providers to provide the best possible care for the least cost. Instead, government interference in the market creates all kinds of perverse incentives.

      • Mark Frederick

        If you read my response you should have noted that I did not advocate coverage of preexisting conditions or any of the provisions in ACA.

        As you said, ” government interference in the market creates all kinds of perverse incentives.” I agree. I was simply pointing out that government interference in the market can take many forms.

        Once ACA is repealed GOP will not facilitate a free market system for health insurance or health care.

        Instead,lawmakers will cave into or collude with national and state special interests and industry lobbing to carve out protected markets and set asides for their contributors.

        Honestly, I’m not sure whats more destructive ACA or the GOPs concept of a health care / insurance “free” market. ACA wont deliver the cost savings hoped and the GOPs lobbyist fueled vision will impede competition in favor of contributors interests.

        • http://www.jeremyrhammond.com Jeremy R. Hammond

          My apologies for any misunderstanding I had of your comments. But you prefaced your comment with:

          “The efficacy of unfettered market place in regard to health care is indeed a myth, if not for the reasons cited by Keller.”

          That would seem to suggest you think the government should manage the health care industry, and it was upon that understanding that I read your further comments. Now it seems you are actually advocating for a free market in health care (juts not the “free market” as per the kind favored by the GOP).

          If so, it seems we are in agreement. Feel free to clarify further, because I confess I’m still confused.