More conservative misinformation on health-care reform

Mar 9, 2010 — Washington Post

Ezra Klein

I'm not sure whether Stephen Spruiell actually doesn't know how the health-care reform legislation works or is simply being purposefully obtuse in service of his argument, but either way, it's not comforting to see a post, this late in the debate, that is this misinformed on what the bill actually does.

Spruiell think there's a contradiction between disagreeing that "Obamacare represents the government annexation of one-sixth of the U.S. economy" and saying that the insurance offered through the exchanges will now be subject to a basket of regulations. Putting aside the question of whether government regulations are the same as "annexation" (in which case, the apple I'm eating is federally annexed, and I never knew socialism could be this crisp and delicious), the regulations in question are limited to insurance being offered on the exchanges.

Why does that matter? Because the exchanges, as you can see on Page 20 of this CBO analysis, are expected to serve 25 million people by 2019. That is to say, these regulations will be limited to less than 10 percent of the market. And that 10 percent of the market will be primarily composed of the uninsured. Larger employers, and people like me who get their insurance from larger employers, are literally banned from participating in the exchanges, though I hope that will eventually change.

Say what you will about this. It is not "the government annexation of one-sixth of the U.S. economy." It is the government setting up and imposing regulations on a private insurance market to serve the uninsured, self-insured and people in very small businesses who, altogether, will make up less than 10 percent of the insurance market.

Spruiell goes on to say a bunch of other things that are not true. I'll just focus on one: He says the bill "causes premiums to go up," and "makes up for this with subsidies." I'll assume that he's just confused about this CBO report (pdf). But it's really not that confusing. The answer to this question is on Page 6, where you'll find a table comparing, among other things, "Difference in Price of a Given Amount of Insurance Coverage for a Given Group of Enrollees." That is to say, how much will the same insurance package for the same people cost before and after reform? The answer is that it would be 7 to 10 percent cheaper after reform.

The confusion with this report is that it also says that the premiums people in the individual market are actually paying increase after reform (people outside the individual market -- the majority of the population -- see their premiums go down, full stop). There are two reasons for that: The main one is that the subsidies make it possible for them to purchase better policies. Second, there are minimum levels of coverage that insurers will have to abide by, ending the days when they can sell people something called "insurance" that doesn't actually protect people in the case of a health-care problem.

That means people are buying better policies, but in the only apples-to-apples comparison that makes sense, health-care reform makes the premiums on a given insurance policy cheaper. Because of the subsidies (and, to a lesser extent, regulations) people are also buying better insurance policies. Confusing the fact that people can now afford more generous insurance coverage with insurance becoming more expensive is like suggesting that my raise made the cost of food increase.

There are a number of reasons to oppose health-care reform that make perfect sense. But most of them would lead to a complicated, nuanced sort of opposition -- something like the mirror image of the resigned, slightly disappointed support that's prevalent among progressives (David Brooks specializes in this particular emotion). But the more I read movement conservatives writing about this bill, the more I think the ferociousness of their opposition rests atop a vast foundation of misinformation. They're right to be scared of the bill they think President Obama is passing. They're just wrong to think he's passing that bill.