Analyzing the Gimmicks in Warren’s Health Care Plan

Six weeks ago, this publication published “Elizabeth Warren Has a Plan…For Avoiding Your Health Care Questions.” That plan came to fruition last Friday, when Warren released a paper (and two accompanying analyses) claiming that she can fund her single-payer health care program without raising taxes on the middle class.

Both her opponents in the Democratic presidential primary and conservative commentators immediately criticized Warren’s plan for the gimmicks and assumptions used to arrive at her estimate. Her paper claims she can reduce the 10-year cost of single payer—the amount of new federal revenues needed to fund the program, over and above the dollars already spent on health care (e.g., existing federal spending on Medicare, Medicaid, etc.)—from $34 trillion in an October Urban Institute estimate to only $20.5 trillion. On top of this 40 percent reduction in the cost of single payer, Warren claims she can raise the $20.5 trillion without a middle-class tax increase.

Why Single-Payer Advocates Demonize Opponents of Government-Run Health Care

Earlier this summer, I wrote an article, based upon research for my forthcoming book, outlining the ways a single-payer health care system will lead to greater fraud and corruption. That afternoon, I received the following message—sent not just once, but four separate times—in my firm’s e-mail inbox:

Just finished reading the fear mongering article that Chris wrote for RCP. I am looking forward to reading and refuting his book on ‘single payer’. Id love to know which insurance companies own his arse via monetary payments. It’s obvious by Chris’ lack of salient facts regarding single payer that he is owned by some corporation. Since RCP only makes it look like others can comment you were spared from me systematically destroying your BS with the real facts of health care. In closing, go [f-ck] yourself you corporate [b-tch].

Whether in vulgar e-mails, Twitter rants, or blog posts, single payer supporters often start out by assuming that anyone opposed to socialized medicine must by definition have received some sort of payoff from drug companies or insurance companies. Even in my case, however, that claim has very little validity. More importantly, calling anyone opposed to single payer a corporate shill patronizes and insults the American people—the same people whose support they need to enact the proposal in the first place.

Take Me as an Example

If folks want to play “Gotcha” games with this nugget, they can—and some will—but there’s much less to this history than meets the eye. For starters, I took the lobbying job when I was aged 24, a little over a year out of grad school, and for the princely salary of…$39,000 per year. I never made six figures as a registered lobbyist—not even close, actually—and earned less in three and a half years as a registered lobbyist than most actual lobbyists make in one.

To be honest, I did little actual lobbying. My inclusion on the list of registered lobbyists represented more of an abundance of caution by my firm than anything else. (Under the federal Lobbying Disclosure Act, individuals do not have to register as a lobbyist if fewer than 20 percent of their hours are spent in paid lobbying activities.)

I prepared memos ahead of lobbying meetings, and drafted letters following those meetings, but precious little beyond that. After three years, I left to go back to Capitol Hill in a more senior role, where I had wanted to work all along.

More to the point: I haven’t taken a dime of support from corporate interests to shill for their positions—and I won’t, period. My views and reputation are not for sale. They’re not even for rent.

Don’t Insult the American People

Even Ezra Klein, of all people, acknowledged Americans’ deep resistance to change regarding health care. In a July article analyzing whether individuals can keep their health insurance—an issue that has tripped up Kamala Harris, among others, during the Democratic presidential campaign—Klein asked some pertinent questions:

If the private insurance market is such a nightmare, why is the public so loath to abandon it? Why have past reformers so often been punished for trying to take away what people have and replace it with something better?…

Risk aversion [in health policy] is real, and it’s dangerous. Health reformers don’t tiptoe around it because they wouldn’t prefer to imagine bigger, more ambitious plans. They tiptoe around it because they have seen its power to destroy even modest plans. There may be a better strategy than that. I hope there is. But it starts with taking the public’s fear of dramatic change seriously, not trying to deny its power.

Yet, judging from the amount of times Bernie Sanders attacks “millionaires and billionaires” in his campaign speeches, he and others find it much easier to ignore the substance of Americans’ concerns, and instead blame corporations and “the rich” for deluding the public.

Even Slate admitted that “to the President’s critics, it sounds patronizing. I was doing the right thing, but the slow American people didn’t get it” (emphasis original). Single-payer supporters fall into this trap on health care: “We could enact our socialist paradise easily, if only the health insurers and drug companies hadn’t bought off so many people.”

Starting off by questioning motives—by assuming everyone with any objections to single payer automatically must be a shill of corporate interests, just trying to bilk the sick and dying out of more money to pad their wallets—doesn’t seem like the best way to win friends and influence people, let alone pass a massive bill like single payer. And it speaks volumes about the radical left that they seem more intent on the former than the latter.

This post was originally published at The Federalist.

Three Obstacles to Senate Democrats’ Health Care Vision

If Democrats win a “clean sweep” in the 2020 elections—win back the White House and the Senate, while retaining control of the House—what will their health care vision look like? Surprisingly for those watching Democratic presidential debates, single payer does not feature prominently for some members of Congress—at least not explicitly, or immediately. But that doesn’t make the proposals any more plausible.

Ezra Klein at Vox spent some time talking with prominent Senate Democrats, to take their temperature on what they would do should the political trifecta provide them an opportunity to legislate in 2021. Apart from the typical “Voxplanations” in the article—really, did Klein have to make not one but two factual errors in his article’s first sentence?—the philosophy and policies the Senate Democrats laid out don’t stand up to serious scrutiny, on multiple levels.

Problem 1: Politics

The first problem comes in the form of a dilemma articulated by none other than Ezra Klein, just a few weeks ago. Just before the last Democratic debate in July, Klein wrote that liberals should not dismiss with a patronizing shrug Americans’ reluctance to give up their current health coverage:

If the private insurance market is such a nightmare, why is the public so loath to abandon it? Why have past reformers so often been punished for trying to take away what people have and replace it with something better?…

Risk aversion [in health policy] is real, and it’s dangerous. Health reformers don’t tiptoe around it because they wouldn’t prefer to imagine bigger, more ambitious plans. They tiptoe around it because they have seen its power to destroy even modest plans. There may be a better strategy than that. I hope there is. But it starts with taking the public’s fear of dramatic change seriously, not trying to deny its power.

Democrats’ “go big or go home” theory lies in direct contrast to the inherent unease Klein identified in the zeitgeist not four weeks ago.

Problem 2: Policy

Klein and the Senate Democrats attempt to square the circle by talking about choice and keeping a role for private insurance. The problem comes because at bottom, many if not most Democrats don’t truly believe in that principle. Their own statements belie their claims, and the policy Democrats end up crafting would doubtless follow suit.

Does this sound like someone who 1) would maintain private insurance, if she could get away with abolishing it, and 2) will write legislation that puts the private system on a truly level playing field with the government-run plan? If you believe either of those premises, I’ve got some land to sell you.

In my forthcoming book and elsewhere, I have outlined some of the inherent biases that Democratic proposals would give to government-run coverage over private insurance: Billions in taxpayer funding; a network of physicians and hospitals coerced into participating in government insurance, and paid far less than private insurance can pay medical providers; automatic enrollment into the government-run plan; and many more. Why else would the founder of the “public option” say that “it’s not a Trojan horse” for single payer—“it’s just right there!”

Problem 3: Process

Because Democrats will not have a 60-vote margin to overcome a Republican filibuster even if they retake the majority in 2020, Klein argues they can enact the bulk of their agenda through the budget reconciliation process. He claims that “if Democrats confine themselves to lowering the Medicare age, adding a [government-run plan], and negotiating drug prices, there’s reason to believe it might pass parliamentary muster.”

Of course Klein would say that—because he never worked in the Senate. It also appears he never read my primer on the Senate’s “Byrd rule,” which governs reconciliation procedures in the Senate. Had he done either, he probably wouldn’t have made that overly simplistic, and likely incorrect, statement.

Take negotiating drug prices. The Congressional Budget Office first stated in 2007—and reaffirmed this May—its opinion that on its own, allowing Medicare to negotiate drug prices would not lead to any additional savings.

That said, Democrats this year have introduced legislation with a “stick” designed to force drug companies to the “negotiating” table. Rep. Lloyd Doggett (D-Texas) introduced a bill (H.R. 1046) requiring federal officials to license the patents of companies that refuse to “negotiate” with Medicare.

While threatening to confiscate their patents might allow federal bureaucrats to coerce additional price concessions from drug companies, and thus scorable budgetary savings, the provisions of the Doggett bill bring their own procedural problems. Patents lie within the scope of the House and Senate Judiciary Committees, not the committees with jurisdiction over health care issues (Senate Finance, House Ways and Means, and House Energy and Commerce).

While Doggett tried to draft his bill to avoid touching those committees’ jurisdiction, he did not, and likely could not, avoid it entirely. For instance, language on lines 4-7 of page six of the Doggett bill allows drug companies whose patents get licensed to “seek recovery against the United States in the…Court of Federal Claims”—a clear reference to matter within the jurisdiction of the Judiciary Committees. If Democrats include this provision in a reconciliation bill, the parliamentarian almost certainly advise that this provision exceeds the scope of the health care committees, which could kill the reconciliation bill entirely.

But if Democrats don’t include a provision allowing drug manufacturers whose patents get licensed the opportunity to receive fair compensation, the drug companies would likely challenge the bill’s constitutionality. They would claim the drug “negotiation” language violates the Fifth Amendment’s prohibition on “takings,” and omitting the language to let them apply for just compensation in court would give them a much more compelling case. Therein lies the “darned if you do, darned if you don’t” dilemma reconciliation often presents: including provisions could kill the entire legislation, but excluding them could make portions of the legislation unworkable.

Remember: Republicans had to take stricter verification provisions out of their “repeal-and-replace” legislation in March 2017—as I had predicted—due to the “Byrd rule.” (The provisions went outside the scope of the committees of jurisdiction, and touched on Title II of the Social Security Act—both verboten under budget reconciliation.)

If Republicans had to give up on provisions designed to ensure illegal immigrants couldn’t receive taxpayer-funded insurance subsidies due to Senate procedure, Democrats similarly will have to give up provisions they care about should they use budget reconciliation for health care. While it’s premature to speculate, I wouldn’t count myself surprised if they have to give up on drug “negotiation” entirely.

1994 Redux?

Klein’s claims of a “consensus” aside, Democrats could face a reprise of their debacle in 1993-94—or, frankly, of Republicans’ efforts in 2017. During both health care debates, a lack of agreement among the majority party in Congress—single payer versus “managed competition” in 1993-94, and “repeal versus replace” in 2017—meant that each majority party ended up spinning its wheels.

To achieve “consensus” on health care, the left hand of the Democratic Party must banish the far-left hand. But even Democrats have admitted that the rhetoric in the presidential debates is having the opposite effect—which makes Klein’s talk of success in 2021 wishful thinking more than a realistic prediction.

This post was originally published at The Federalist.

Obamacare’s Terrible, Horrible, No Good, Very Bad Week

It’s now been seven days since Obamacare’s exchanges officially launched. In reality, however, the “launch” has more closely resembled a blooper reel of rocket failures than a smooth takeoff. Here is but a sampling of the problems, failures, and glitches that have turned the exchanges into a comedy of errors:

TUESDAY

  • Some state exchanges delay their opening to address technical problems; Maryland’s exchange postpones its launch by four hours.
  • When the federally run exchanges in 36 states open, they are immediately overwhelmed by massive volume and technical errors. One MSNBC reporter spends more than half an hour trying in vain to establish an account and compare insurance options.
  • Reuters reports that in total, 47 state exchange websites “turned up frequent error messages.”

WEDNESDAY

  • The Los Angeles Times reports that California’s state exchange vastly overstated its first-day web traffic. Instead of receiving 5 million hits, the exchange actually received 645,000 visitors.
  • The Washington Examiner notes that new co-operative health insurance programs funded by billions of Obamacare dollars featured “sites [that] were difficult to navigate and provided little understandable insurance information on topics like eligibility, costs, and benefits.”

THURSDAY

  • The Washington Post’s Sarah Kliff writes a story, illustrated with a picture of a unicorn, asking whether anyone has actually purchased health insurance on from the federally run exchange—or whether these individuals are just “mythical creature[s].”
  • An Arizona television station profiles a leukemia survivor who “just got a letter from his insurance carrier saying as of January 1, he would be dropped from coverage because of new regulations under Obamacare. His doctor at the Mayo Clinic may be gone as well.”

FRIDAY

  • Liberal blogger Ezra Klein admits that the Administration “did a terrible disservice by building a website that, four days into launch, is still unusable for most Americans.”
  • CNBC reports that “as few as 1 in 100 applications on the federal exchange contains enough information to enroll the applicant in a plan.”
  • One of the few individuals claiming to have enrolled in a federally run insurance exchange admits that “he has not in fact enrolled in a health-care plan.”
  • The Department of Health and Human Services (HHS) announces it will take major portions of its website offline over the weekend for repairs and major upgrades.

SATURDAY

  • Reuters interviews IT experts who believe the exchange contains major design flaws: “so much traffic was going back and forth between [exchange] users’ computers and the server hosting the government website, it was as if the system was attacking itself.”
  • The San Jose Mercury News profiles people suffering premium increases due to Obamacare—including one whose premiums may increase by nearly $10,000 for his family of four.

SUNDAY

  • Treasury Secretary Jack Lew refuses to tell Fox News’s Chris Wallace how many people have, or have not, enrolled in coverage.
  • The Charlotte Observer profiles one Charlotte family, whose premiums could rise from $228 per month to $1,208 per month—a 430 percent increase—because their current health insurance does not meet Obamacare’s standards.
  • The Wall Street Journal quotes technology consultants as saying that the federal exchange site “appeared to be built on a sloppy software foundation,” and that “basic Web-efficiency techniques weren’t used…clog[ging] the website’s plumbing.”

MONDAY

  • Politico finds many individuals are resorting to paper applications for coverage, due to the continued problems with online exchanges.
  • The New York Post reports that navigators were entirely unprepared for the launch of Obamacare’s exchanges last week; many staffers working for purported navigators seemed unaware the program existed.
  • HHS announces it is taking the exchange website offline again for more repairs.

Given this track record, some may find the words of Saturday’s Reuters piece prescient: “Five outside technology experts interviewed by Reuters…say they believe flaws in system architecture, not traffic alone, contributed to the problems” with the exchanges.

That quote is an apt metaphor for the entire law itself. Just as the exchanges’ problems stem from fundamental “flaws in system architecture,” so do these “glitches” prove that the entire law is unworkable—not just parts of the measure. It’s why Congress should act now to save America from this unpopular, unfair, and unworkable law.

This post was originally published at The Daily Signal.

Ezra Klein Can’t Save Obamacare’s Broken Premium Promise

Ezra Klein’s column in Bloomberg this week attempted to defend then-Senator Barack Obama’s repeated promises to lower premiums by $2,500. Unfortunately for Klein, virtually all of his defenses fall short.

First, Klein claims that “there was no time frame attached to the promise.” On this count, he’s flat-out wrong. Campaign advisor Jason Furman—the President’s recent nominee to head the Council of Economic Advisors—told the New York Times in July 2008 that “We think we could get to $2,500 in [premium] savings [per family] by the end of the first term, or be very close to it.” If Klein wants to argue that Americans’ premiums have gone down by $2,500 since 2009, he’s welcome to do so—but I doubt many Americans would believe him.

Second, Klein claims that “the [health care] savings are actually materializing.” He cites a recent study from David Cutler to make his claim, but that study doesn’t actually say health costs and premiums are falling—it just says they’re rising by less than they otherwise would have. Similarly, the Administration has often cited a 2009 study from the Business Roundtable to defend its “lower premiums” claim. I don’t think many Americans would look at the chart from that study and define its projected trend—a line showing premiums going up by “only” $12,400 from 2009 to 2019—as “lowering” premiums.

Premiumchart

Source: Report to Business Roundtable by Hewitt Associates, November 2009.

Third, Klein doesn’t point out that many studies view Obamanomics, not Obamacare, as the root cause of the current slowdown in health spending. One study recently released by the Kaiser Family Foundation—not exactly a group of firebrand conservatives—concluded:

Our analysis suggests that the vast majority (77%) of the recent decline in the health spending trend can be attributed to broader changes in the economy.

Of course, if Klein and the Obama Administration want to take credit for the lousy economy that’s slowing down the growth of costs, they’re welcome to do so.

Finally, Klein spends the second half of his column arguing that people on the exchanges will pay more for insurance, but will get better coverage. Trouble is, that’s not what then-Senator Obama promised. His plan promised that “For those who have insurance now, nothing will change under the Obama plan—except that you will pay less.” Klein effectively admits that neither of those provisions is true—at least some individuals will be forced to buy more expensive coverage.

The fact that Klein’s arguments are so far removed from the purported intent of Obamacare—defining premium savings down, and admitting millions of Americans will lose their current coverage and be forced into more expensive insurance—shows the massive gap between the law’s rhetoric and its reality. If he wants to mount an intellectually honest defense of the law, Klein should start by acknowledging the false promises upon which it was sold to the American people.

This post was originally published at The Daily Signal.