We here at the DKos are not mere Democrats, we are progressives. We laugh at conservatives for their fact-free positions on climate change, economics and national security. We fight against "truthiness" (i.e., things that sound true but aren't).
Unfortunately, this site's debate on healthcare has taken a turn towards truthiness. Here I will discuss a few of those:
- Subsidies go right to the pockets of insurance companies.
- The excise tax on "cadillac" plans just means workers get screwed by the corporations since they'll just cut the insurance.
- The mandate forces people to buy junk insurance whether or not they can afford it (or alternatively 30 mln people are being covered with a gun to their head).
As Krugman said yesterday
By all means denounce Obama for his failed bipartisan gestures. By all means criticize the administration. But don’t take it out on the tens of millions of Americans who will have health insurance if this bill passes, but will be out of luck — and, in some cases, dead — if it doesn’t.
A few ground rules.
First, 99% of people here would like a national public paln to be offered. 98% want one tied to Medicare rates. 75% want a single payer. Then some small number (which I am one) just want completely socialized system like the veterns. So please, no insults about being a corporatist or how I'm a "shill" for the insurance industry.
Second, if no expert in the field who is not being paid by someone with a politican agenda supports your point, you're in trouble. Please don't taunt in the comments. If you have evidence that counters my points, please link to it. Waving your hands and going through your econ 101 lecture notes isn't a counterargument. Saying its self-evident is also not sufficient. Its very cold today but there's still global warming.
- Subsidies don't go to the pockets of insurance companies.
The CBO doesn't think so, it hasn't been true in Massachusetts and Gruber from MIT doesn't think so.
* Sizeable premium savings for young. An individual aged 25 at $19,000 in income (175 percent of poverty) would benefit from tax credits and would save, on average, $685. A higher income young person could always buy a "bronze" plan without tax credits for a savings of $230. Moreover, they could qualify for a catastrophic policy – also known as a "young invincible" policy. This policy would cost on average only $1,190, saving them $585 at all income levels.
* Even larger premium savings for older individuals. A person age 60 with income at $19,000 (175 percent of poverty) would save, on average, $7,890. A person at age 60 with income at $40,600 (375 percent of poverty) would continue to benefit from tax credits and would save, on average, $4,100. Even at a high enough income level to not benefit from tax credits, older persons purchasing a bronze plan would save about $2,800.
* Also large premium savings for a family. A family with income at $38,000 (175 percent of poverty) would save, on average, $8,550. That same family with higher income could buy a "bronze" plan without tax credits at a savings of $2,430 over current nongroup prices.
The insurance cos only make 3.3% profit which isn't evidence of an ability to extract monopoly profits. Provider-side monopolies is a larger issue for healthcare costs.
Healthcare executives make a lot of money, but executive compensation is a major issue across industries including the financial industry. US CEOs often make more than 10 times more than their foreign counterparts. This problem goes well beyond the healthcare industry.
- The "excise" tax will slow the grow of health insurance costs and the savings from this will translate into increased wages.
The CBO thinks so:
Changes in the extent of employment-based health insurance affect federal revenues because most payments for that coverage are tax-preferred. If employers increase or decrease the amount of compensation they provide in the form of health insurance (relative to current-law projections), CBO and JCT assume that offsetting changes will occur in wages and other forms of compensation—which are generally taxable—to hold total compensation roughly the same. Such effects also arise with respect to specific elements of the proposal (such as the tax credits for small employers), and those effects are included within the estimates for those elements.
Other academics agree:
There is, in other words, very good evidence that employers pass health-care savings onto employees. A Rand study by Dana Goldman, Neeraj Sood and Arleen Leibowitz examined a particular firm's response to a period of premium increases and found that "about two-thirds of the premium increase is financed out of cash wages and the remaining one-thirds is financed by a reduction in benefits." Another study by Katherine Baicker and Amitabh Chandra found that a 10 percent increase in premiums "results in an offsetting decrease in wages of 2.3 percent," which is fairly impressive given that income is much higher than health-care premiums.
- The coverage offered for individuals will be better and cost less after subsidies.
n particular, the average insurance policy in this market would cover a substantially larger share of enrollees’ costs for health care (on average) and a slightly wider range of benefits. Those expansions would reflect both the minimum level of coverage (and related requirements) specified in the proposal and people’s decisions to purchase more extensive coverage in response to the structure of subsidies. ... The majority of nongroup enrollees (about 57 percent) would receive subsidies via the new insurance exchanges, and those subsidies, on average, would cover nearly two-thirds of the total premium ...
The mandate is there to force rich and healthy people to buy health insurance so that the people who have health insurance (who often are sicker) don't have to pay more.
But if you remove the individual mandate, you're caught in the reverse of our current problem: The triathlete doesn't buy insurance. Fine, you might say. Let the insurer get gamed. They deserve it.
The insurers, however, are not the ones who will be gamed. The sick are. Imagine the triathlete's expected medical cost for a year is $200 and the diabetic's cost is $20,000. And imagine we have three more people who are normal risks, and their expected cost in $6,000. If they all purchase coverage, the cost of insurance is $7,640. Let the triathlete walk away and the cost is $9,500. Now, one of the younger folks at normal cost just can't afford that. He drops out. Now the average cost is $10,600. This prices out the diabetic, so now she's uninsured. Or maybe it prices out the next normal-cost person, so costs jump to $13,000.