Lies, damn lies, and Paul Krugman

I’ve written many times before that few scoundrels are worse than the man who lies in accusing another man of lying. Paul Krugman is among the worst of that bunch. In his latest, he accuses Republicans of lying at the health care “summit”. (As an aside, the very tone of the column confirms that Republicans won the debate. Krugman would much rather have written about how Obama won the debate, if he could have.) Let’s take it apart:

It was obvious how things would go as soon as the first Republican speaker, Senator Lamar Alexander, delivered his remarks. He was presumably chosen because he’s folksy and likable and could make his party’s position sound reasonable. But right off the bat he delivered a whopper, asserting that under the Democratic plan, “for millions of Americans, premiums will go up.”

Wow. I guess you could say that he wasn’t technically lying, since the Congressional Budget Office analysis of the Senate Democrats’ plan does say that average payments for insurance would go up. But it also makes it clear that this would happen only because people would buy more and better coverage. The “price of a given amount of insurance coverage” would fall, not rise — and the actual cost to many Americans would fall sharply thanks to federal aid.

I think the best way to be fair here is to quote the CBO report (p. 6):

Average premiums would be 27 percent to 30 percent higher because a greater amount of coverage would be obtained. In 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.

So what the CBO says is that premiums paid would increase because of two factors: (1) people will be forced into more comprehensive plans, and (2) subsidies will encourage people to buy even more comprehensive plans than that. The report does not elaborate on the relative importance of the two factors, although we can guess that the more important factor is probably listed first. The CBO subsequently mentions some more minor factors with a positive impact.

The Krugman/Democratic spin is that the premium increase is okay, because people are buying more and better coverage. (By the way, nowhere does the CBO say “better”.) They ignore the fact that people are (at least partly, and probably mostly) buying more coverage against their will.

But Krugman doesn’t merely say that Democrats have a counter-argument. No, based on that counter-argument, he says that Alexander is lying, except in the “technical” sense that it is telling the truth. What a scoundrel.

Krugman is right when he says the CBO says that the price of a given amount of insurance will fall. (His use of the word “sharply” is pure spin though, since that impact is much smaller than the primary one.) Most people will find that to be to cold comfort, however, since their given amount of insurance will probably no longer be allowed. But, on this point I’ll grant Krugman the courtesy he would not grant to Senator Alexander, of not calling him a liar just for making an argument I disagree with.

But this brings up another point: the CBO analysis is not the gospel. CBO analyses are frequently rosy, in part because they are required to use a given methodology (one that is overly static and that legislators have learned how to game), and in part because they are required to analyze what is put before them, rather than what everyone knows will happen (e.g, the Medicare fix). Other studies, such as one by the Oliver Wyman actuarial firm commissioned by the Blue Cross Blue Shield association, are much less rosy. Oliver Wyman found that within five years health care costs will go up 54 percent, resulting in a significant increase in premiums, such as a 35 percent increase among the youngest third of the population.

Alexander never mentioned the CBO. (Transcript here.) So, although his statement was fully justified by the CBO, it was also justified by another study that Krugman does not rebut at all. And so Krugman is doubly dishonest for calling Alexander a liar.

That’s the worst of the column, but it’s not the end of it. Krugman continues:

His fib on premiums was quickly followed by a fib on process. Democrats, having already passed a health bill with 60 votes in the Senate, now plan to use a simple majority vote to modify some of the numbers, a process known as reconciliation. Mr. Alexander declared that reconciliation has “never been used for something like this.” Well, I don’t know what “like this” means, but reconciliation has, in fact, been used for previous health reforms — and was used to push through both of the Bush tax cuts at a budget cost of $1.8 trillion, twice the bill for health reform.

To be sure, Krugman is entitled to his opinion about what is or is not like this. But so is Alexander. Is Krugman simply unable to say “I disagree”? Must he call him a liar?

For the record, by any reasonable assessment reconciliation has never been used for something like this. Krugman does not give any details of the “previous health reforms” that reconciliation was used for, which is a hint that he’s not being forthright. There’s a list here of the occasions reconciliation was used. There’s only one bill on the list that directly affected private health care, the bill that created COBRA. There’s no comparison between COBRA and the current bill. COBRA asked that insurers offer continued coverage (for a fee, of course) for people in group plans who leave their job. It did not institute price controls and an individual mandate, comprehensively regulate the health industry, dictate what health plans must cover, provide federal funding for abortion, and create a massive new entitlement program.

What really struck me about the meeting, however, was the inability of Republicans to explain how they propose dealing with the issue that, rightly, is at the emotional center of much health care debate: the plight of Americans who suffer from pre-existing medical conditions. In other advanced countries, everyone gets essential care whatever their medical history. But in America, a bout of cancer, an inherited genetic disorder, or even, in some states, having been a victim of domestic violence can make you uninsurable, and thus make adequate health care unaffordable.

Well, they did talk about high-risk pools. If you don’t like high-risk pools, that’s fine, but don’t pretend that Republicans didn’t say anything on the topic.

The next couple of paragraphs, while still nonsense, don’t contain outright lies, so we’ll skip ahead:

Look at the Congressional Budget Office analysis of the House G.O.P. plan. That analysis is discreetly worded, with the budget office declaring somewhat obscurely that while the number of uninsured Americans wouldn’t change much, “the pool of people without health insurance would end up being less healthy, on average, than under current law.” But here’s the translation: While some people would gain insurance, the people losing insurance would be those who need it most.

“Translation” my foot. The CBO says (p. 7) that more young people would start buying coverage than older people. That’s why the pool of people without coverage would become less healthy. It says not one word about people losing coverage. Krugman is making it up.

As for the number of uninsured not changing much, the CBO says that the House Republican plan would extend coverage to 3 million more people. You can decide for yourself whether that counts as “much” or not. There’s two points to make. First, the Republican plan focuses on cutting costs, with the idea that you extend coverage by making it more affordable. (That’s the opposite of the Democratic plan, which dramatically increases costs and then compensates with big government subsidies.) I’m not sure why the CBO so undervalued the law of demand (lower cost leads to greater quantity demanded). Again, the CBO is not the gospel. But, second, the plan the CBO scored did not (as I read it) include the key Republican idea to eliminate the tax penalty for individual health insurance. Correcting the tax penalty would put coverage much more easily within reach for those not covered by an employer.

Is Paul Krugman the biggest scoundrel of all political pundits? That’s hard to say. But he certainly strengthened his case here.

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