Debating the President's Portsmouth pitch (part 20)

Thanks for making it all the way through this series of posts analyzing and discussing the President’s health care remarks at the Portsmouth, New Hampshire town hall.

I have converted this entire series into a memo for easy printing and reading.

If you’d like the entire series in printed form, here is a PDF of all 2o posts in one document.

THE PRESIDENT: I don’t have to explain to you that nearly 46 million Americans don’t have health insurance coverage today. In the wealthiest nation on Earth, 46 million of our fellow citizens have no coverage. They are just vulnerable. If something happens, they go bankrupt, or they don’t get the care they need.

But of those 45.7 million people:

  • 6.4 million are enrolled in Medicaid or S-CHIP and just gave the Census taker the wrong answer. I’m serious. This is called the Medicaid undercount.
  • Another 4.3 million are eligible for Medicaid or S-CHIP and have not enrolled. If they need care, the hospital or clinic generally enrolls them. They are protected against risk even though they don’t show up on the rolls as insured.
  • Another 9.3 million are non-citizens. Different people come to different conclusions about what portion of this group should receive taxpayer-subsidized health insurance.
  • Another 10.1 million have income more than three times the poverty line.
  • Leaving about 15.6 million remaining uninsured, of whom about 5 million are childless adults.

The 46 million figure is technically correct, but it dramatically overstates the size of the population that many Americans would conclude is deserving of additional taxpayer subsidies.

I wrote about this topic in early April: How many uninsured people need additional help from taxpayers?

I hope you have found this series of posts to be a positive contribution to a civil, impassioned, informed policy debate.


Here are all 20 posts in this series:

  1. The President’s overpromise that everyone can keep their health plan
  2. Putting the government in charge of your health insurance
  3. Waiting in line
  4. Government-mandated benefits
  5. Preventive care does not save money (in the aggregate)
  6. The House bill would increase short-term, 10th year, and long-term budget deficits
  7. The President was incorrect — AARP opposes the bill
  8. The bills would take Medicare savings needed for solvency and spend them on a new entitlement
  9. Medicare is not a good example of government-run health care because Medicare is fiscally unsustainable
  10. Even if the public option drops out of legislation, other parts of these bills would put private insurance under government control
  11. The President says the public option will keep private insurers honest at the same time he proposes cutting payments to private insurers competing with the Medicare public option
  12. The pending bills would move more cost-benefit decisions from insurers to people chosen by the government
  13. Guaranteed renewal and guaranteed issue
  14. The President says “we may be able to get even more than” the $80 B of budgetary savings that the pharmaceutical industry thought was a ceiling promised by the White House.
  15. The President says he’s not “promoting” a single-payer plan, but the only concern he raises is a disruptive transition.
  16. Many examples suggest that the government cannot compete on a level playing field with private firms.
  17. The President trashes the U.S. Postal Service and undermines the case that government can run a complex health system.
  18. The President understates the annual cost of new spending by a factor of two.
  19. The President says that 2/3 of the offsets come from Medicare and Medicaid spending, while the only public estimate (for the House Bill) shows 21% instead. He also advocates a tax proposal that Congressional Democrats killed last Winter.
  20. There are 46 million people who are technically uninsured, but the target population is probably one-third to one-half that size.

I agree with the President that America needs to have a vigorous and well-informed debate about the substance of health care reform. I hope this series contributes to that debate.

Debating the President's Portsmouth pitch (part 19)

Here’s the second-to-last post in this series discussing the President’s remarks on health care reform in Portsmouth, New Hampshire:

THE PRESIDENT: About two-thirds of those costs we can cover by eliminating the inefficiencies that I already mentioned. So I already talked about $177 billion worth of subsidies to the insurance companies. Let’s take that money, let’s put it in the kitty. There’s about $500 billion to $600 billion over 10 years that can be saved without cutting benefits for people who are currently receiving Medicare, actually making the system more efficient over time.

That does still leave, though, anywhere from $300 billion to $400 billion over 10 years, or $30 billion to $40 billion a year. That does have to be paid for, and we will need new sources of revenue to pay for it. And I’ve made a proposal that would — I want to just be very clear — the proposal, my preferred approach to this would have been to take people like myself who make more than $250,000 a year, and limit the itemized deductions that we can take to the same level as middle-class folks can take them.

Maybe the President knows something about the Baucus bill that isn’t public. In the House bill only 21% of the savings come from Medicare and Medicaid, not two-thirds.

Congressional Democrats rejected the President’s proposal to limited itemized deductions last winter. The House bill would instead raise income tax rates on high-income individuals and successful small business owners.


Other posts in this series:

  1. The President’s overpromise that everyone can keep their health plan
  2. Putting the government in charge of your health insurance
  3. Waiting in line
  4. Government-mandated benefits
  5. Preventive care does not save money (in the aggregate)
  6. The House bill would increase short-term, 10th year, and long-term budget deficits
  7. The President was incorrect — AARP opposes the bill
  8. The bills would take Medicare savings needed for solvency and spend them on a new entitlement
  9. Medicare is not a good example of government-run health care because Medicare is fiscally unsustainable
  10. Even if the public option drops out of legislation, other parts of these bills would put private insurance under government control
  11. The President says the public option will keep private insurers honest at the same time he proposes cutting payments to private insurers competing with the Medicare public option
  12. The pending bills would move more cost-benefit decisions from insurers to people chosen by the government
  13. Guaranteed renewal and guaranteed issue
  14. The President says “we may be able to get even more than” the $80 B of budgetary savings that the pharmaceutical industry thought was a ceiling promised by the White House.
  15. The President says he’s not “promoting” a single-payer plan, but the only concern he raises is a disruptive transition.
  16. Many examples suggest that the government cannot compete on a level playing field with private firms.
  17. The President trashes the U.S. Postal Service and undermines the case that government can run a complex health system.
  18. The President understates the annual cost of new spending by a factor of two.

Debating the President's Portsmouth pitch (part 18)

This is #18 in a series of 20 posts discussing the President’s remarks on health care reform in Portsmouth, New Hampshire:

THE PRESIDENT: So it’s about a hundred billion dollars a year to cover everybody and to implement some of the insurance reforms that we’re talked about.

I assume this is just an honest arithmetic error, in which he assumed that a trillion dollars of new spending would be spread out over 10 years. Since the spending doesn’t start until year 4, and isn’t fully phased-in until year 6, the actual spending is much higher. The House bill would increase federal spending by $202 B in 2019, the 10th year of the estimate, twice the President’s stated figure.


Other posts in this series:

  1. The President’s overpromise that everyone can keep their health plan
  2. Putting the government in charge of your health insurance
  3. Waiting in line
  4. Government-mandated benefits
  5. Preventive care does not save money (in the aggregate)
  6. The House bill would increase short-term, 10th year, and long-term budget deficits
  7. The President was incorrect — AARP opposes the bill
  8. The bills would take Medicare savings needed for solvency and spend them on a new entitlement
  9. Medicare is not a good example of government-run health care because Medicare is fiscally unsustainable
  10. Even if the public option drops out of legislation, other parts of these bills would put private insurance under government control
  11. The President says the public option will keep private insurers honest at the same time he proposes cutting payments to private insurers competing with the Medicare public option
  12. The pending bills would move more cost-benefit decisions from insurers to people chosen by the government
  13. Guaranteed renewal and guaranteed issue
  14. The President says “we may be able to get even more than” the $80 B of budgetary savings that the pharmaceutical industry thought was a ceiling promised by the White House.
  15. The President says he’s not “promoting” a single-payer plan, but the only concern he raises is a disruptive transition.
  16. Many examples suggest that the government cannot compete on a level playing field with private firms.
  17. The President trashes the U.S. Postal Service and undermines the case that government can run a complex health system.

Debating the President's Portsmouth pitch (part 17)

We’re in the home stretch.

THE PRESIDENT: I mean, if you think about — if you think about it, UPS and FedEx are doing just fine, right? No, they are. It’s the Post Office that’s always having problems.

I think the President was using this example to demonstrate that private firms can compete with the government. It came out wrong. He undermined the case for more government control, and especially for a public option, by pointing out that the government cannot deliver the mail and stay on budget.


Other posts in this series:

  1. The President’s overpromise that everyone can keep their health plan
  2. Putting the government in charge of your health insurance
  3. Waiting in line
  4. Government-mandated benefits
  5. Preventive care does not save money (in the aggregate)
  6. The House bill would increase short-term, 10th year, and long-term budget deficits
  7. The President was incorrect — AARP opposes the bill
  8. The bills would take Medicare savings needed for solvency and spend them on a new entitlement
  9. Medicare is not a good example of government-run health care because Medicare is fiscally unsustainable
  10. Even if the public option drops out of legislation, other parts of these bills would put private insurance under government control
  11. The President says the public option will keep private insurers honest at the same time he proposes cutting payments to private insurers competing with the Medicare public option
  12. The pending bills would move more cost-benefit decisions from insurers to people chosen by the government
  13. Guaranteed renewal and guaranteed issue
  14. The President says “we may be able to get even more than” the $80 B of budgetary savings that the pharmaceutical industry thought was a ceiling promised by the White House.
  15. The President says he’s not “promoting” a single-payer plan, but the only concern he raises is a disruptive transition.
  16. Many examples suggest that the government cannot compete on a level playing field with private firms.

Debating the President's Portsmouth pitch (part 15)

We continue to review the President’s Portsmouth, New Hampshire remarks on health care:

THE PRESIDENT: A single-payer plan would be a plan like Medicare for all, or the kind of plan that they have in Canada, where basically government is the only person — is the only entity that pays for all health care. Everybody has a government-paid-for plan, even though in, depending on which country, the doctors are still private or the hospitals might still be private. In some countries, the doctors work for the government and the hospitals are owned by the government. But the point is, is that government pays for everything, like Medicare for all. That is a single-payer plan.

I have not said that I was a single-payer supporter because, frankly, we historically have had a employer-based system in this country with private insurers, and for us to transition to a system like that I believe would be too disruptive. So what would end up happening would be, a lot of people who currently have employer-based health care would suddenly find themselves dropped, and they would have to go into an entirely new system that had not been fully set up yet. And I would be concerned about the potential destructiveness of that kind of transition.

All right? So I’m not promoting a single-payer plan.

This is interesting – he seems not to object to government being “the only entity that pays for all health care” as a desirable endstate. The only concern he raises is that the transition would be disruptive. He also does not say that he opposes single-payer, merely that he is not promoting it.


Other posts in this series:

  1. The President’s overpromise that everyone can keep their health plan
  2. Putting the government in charge of your health insurance
  3. Waiting in line
  4. Government-mandated benefits
  5. Preventive care does not save money (in the aggregate)
  6. The House bill would increase short-term, 10th year, and long-term budget deficits
  7. The President was incorrect — AARP opposes the bill
  8. The bills would take Medicare savings needed for solvency and spend them on a new entitlement
  9. Medicare is not a good example of government-run health care because Medicare is fiscally unsustainable
  10. Even if the public option drops out of legislation, other parts of these bills would put private insurance under government control
  11. The President says the public option will keep private insurers honest at the same time he proposes cutting payments to private insurers competing with the Medicare public option
  12. The pending bills would move more cost-benefit decisions from insurers to people chosen by the government
  13. Guaranteed renewal and guaranteed issue
  14. The President says “we may be able to get even more than” the $80 B of budgetary savings that the pharmaceutical industry thought was a ceiling promised by the White House.

Debating the President's Portsmouth pitch (part 14)

We continue reviewing the President’s remarks on health care reform in Portsmouth, New Hampshire:

THE PRESIDENT: Now, in terms of savings for you as a Medicare recipient, the biggest one is on prescription drugs, because the prescription drug companies have already said that they would be willing to put up $80 billion in rebates for prescription drugs as part of a health care reform package.

Now, we may be able to get even more than that. But think about it.

Huh. So much for that secret deal that the drug companies had with the White House that their savings would not exceed $80 B over 10 years. “We may be able to get even more than that.” Hmm…

Even after 15 years of working in economic policymaking, I continue to be surprised at the naivete of some American business leaders. Almost three weeks ago I sounded an initial warning:

Hospitals: You’re the deep pockets. Insurers, Business and Pharma: They can make you villains again if they need to cut you more to make the budget numbers work.


Other posts in this series:

  1. The President’s overpromise that everyone can keep their health plan
  2. Putting the government in charge of your health insurance
  3. Waiting in line
  4. Government-mandated benefits
  5. Preventive care does not save money (in the aggregate)
  6. The House bill would increase short-term, 10th year, and long-term budget deficits
  7. The President was incorrect — AARP opposes the bill
  8. The bills would take Medicare savings needed for solvency and spend them on a new entitlement
  9. Medicare is not a good example of government-run health care because Medicare is fiscally unsustainable
  10. Even if the public option drops out of legislation, other parts of these bills would put private insurance under government control
  11. The President says the public option will keep private insurers honest at the same time he proposes cutting payments to private insurers competing with the Medicare public option
  12. The pending bills would move more cost-benefit decisions from insurers to people chosen by the government
  13. Guaranteed renewal and guaranteed issue

Debating the President's Portsmouth pitch (part 10)

Here’s more from the President’s health care reform town hall in Portsmouth, New Hampshire:

THE PRESIDENT: We also want to make sure that everybody has some options. So there’s been talk about this public option. This is where a lot of the idea of government takeover of health care comes from.

The President is correct that “a lot of the idea of government takeover of health care comes from” the public option. Many of the critics are missing that, even if the public option drops out of legislation, other provisions in these bills will effectively put insurance under government control, even while it is offered by private firms.

Continue to the next post in this series…


Other posts in this series:

  1. The President’s overpromise that everyone can keep their health plan
  2. Putting the government in charge of your health insurance
  3. Waiting in line
  4. Government-mandated benefits
  5. Preventive care does not save money (in the aggregate)
  6. The House bill would increase short-term, 10th year, and long-term budget deficits
  7. The President was incorrect — AARP opposes the bill
  8. The bills would take Medicare savings needed for solvency and spend them on a new entitlement
  9. Medicare is not a good example of government-run health care because Medicare is fiscally unsustainable

Debating the President's Portsmouth pitch (part 9)

Here is still more from the President’s health care town hall in Portsmouth, New Hampshire:

THE PRESIDENT: And so I do think it’s important for particularly seniors who currently receive Medicare to understand that if we’re able to get something right like Medicare, then there should be a little more confidence that maybe the government can have a role — not the dominant role, but a role — in making sure the people are treated fairly when it comes to insurance.

But Medicare is fiscally unsustainable. The President already said that earlier in the discussion. So Medicare is not a successful model for a new system, because we can’t afford it.

Continue to the next post in this series…


Other posts in this series:

  1. The President’s overpromise that everyone can keep their health plan
  2. Putting the government in charge of your health insurance
  3. Waiting in line
  4. Government-mandated benefits
  5. Preventive care does not save money (in the aggregate)
  6. The House bill would increase short-term, 10th year, and long-term budget deficits
  7. The President was incorrect — AARP opposes the bill
  8. The bills would take Medicare savings needed for solvency and spend them on a new entitlement

Debating the President's Portsmouth pitch (part 8)

Here is the President talking about health care reform in Portsmouth, New Hampshire:

THE PRESIDENT: [If we do nothing] our deficit will continue to grow because Medicare and Medicaid are on an unsustainable path. Medicare is slated to go into the red in about eight to 10 years.

This statement is true. But the President and his budget director have lowered their bar to say only that health care reform must not increase the deficit, not that it must reduce the deficit. If legislation “cuts” Medicare spending and turns right around and re-spends those funds to create a new rapidly growing health care entitlement, then the underlying deficit problem is unresolved. The legislation being developed in both the House and the Senate just barely meets this condition.

The President’s budget director argues that other reforms in legislation will “bend the cost curve down.” The nonpartisan Congressional Budget Office disagrees, and says the House bill will increase long-term budget deficits relative to current law.

Continue to the next post in this series…


Other posts in this series:

  1. Introduction and the President’s overpromise that everyone can keep their health plan
  2. Putting the government in charge of your health insurance
  3. Waiting in line
  4. Government-mandated benefits
  5. Preventive care does not save money (in the aggregate)
  6. The House bill would increase short-term, 10th year, and long-term budget deficits
  7. The President was incorrect — AARP opposes the bill

Debating the President's Portsmouth pitch (part 7)

Here’s still more from the President in the Portsmouth, New Hampshire town hall on health care reform:

THE PRESIDENT: We have the AARP on board because they know this is a good deal for our seniors.

(later) AARP would not be endorsing a bill if it was undermining Medicare, okay?

After the town hall, AARP issued a statement including the following sentence:

AARP: While the President was correct that AARP will not endorse a health care reform bill that would reduce Medicare benefits, indications that we have endorsed any of the major health care reform bills currently under consideration in Congress are inaccurate.

A political observation: With this statement AARP embarrassed the President. It is a huge deal for a left-leaning interest group like AARP to directly and immediately contradict the President on his top policy priority. I infer that AARP’s leadership is more afraid of their members attacking them for perceived support of these bills than they are of infuriating the President and his staff.

Continue to the next post in this series…


Other posts in this series:

  1. The President’s overpromise that everyone can keep their health plan
  2. Putting the government in charge of your health insurance
  3. Waiting in line
  4. Government-mandated benefits
  5. Preventive care does not save money (in the aggregate)
  6. The House bill would increase short-term, 10th year, and long-term budget deficits
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