So says health care-focused blogger Ezra Klein regarding Obama's repeated claim that his plan would cover everyone. You can assume that it's not something Klein does lightly, say that a good Democrat is lying. But it's hard to escape the conclusion that lying is exactly what Obama is doing.
Here's Klein, this morning:
Obama is simply not being truthful when he says his plan "covers everybody." It doesn't. It makes it easier for everybody to get coverage, but it simply does not cover every American. Every time he says otherwise, he's misleading the voters.
Why can Klein state so baldly that Obama is misleading voters? Because, as Edwards gently pointed out in the debate, only a mandate will produce universal coverage. This is a settled question among people who study health care policy for a living.
Experts estimate that Obama plan would leave 15 million people uninsured. In others words, his plan would cover only two-thirds of the uninsured. That's why I call it Obama's plan for univer health care.
Here's Jonathan Cohn, who literally wrote the book on health care policy (subs only):
There are some differences between what Obama and Edwards have proposed. And by far the biggest, most important one is the fact that Edwards has a "mandate" in his plan: He would require every single American to get insurance. That means his plan is truly "universal."...The best studies out there--by Urban Institute researchers, the RAND Corporation, and MIT economist Jonathan Gruber--suggest that, without a mandate, improving affordability will cover roughly one-third of the people who don't have coverage. Mandating that kids (but not adults) have coverage bumps that up to about a half. Obama's advisers think that, by really loading up on the subsidies--and making enrollment a lot easier by, for example, having an automatic enrollment with voluntary opt-out at your place of work--they can goose that up to two-thirds. But that's getting optimistic--and, even then, you still have around 15 million people who are uninsured.
All of this is not to say that Obama's plan is bad. On the contrary, as Edwards says, it's a "serious" proposal, and there's a case to be made against a mandate. Obama should make it. He should stop mispresenting his plan and argue why the burdens of a mandate outweigh the benefits of universal coverage.
But it might be too late; he seems to be stuck with a lie.
UPDATE: I just read through the comments to see if anyone made a convincing case that Obama is telling the truth. The answer is a loud no.
Some have made the rather post-modern point the "universal" is a term of art, which I don't think is the case, but even if it were, Obama does more than call his plan universal, he says flat-out that everyone will be covered. Others have said that Obama promises to cover everyone within a few years, gradually filling the holes as needed--an argument that makes my case for me. Most have tried to deflect the questions that this raises about Obama's character by making wild claims about Edwards's plan.
The criticism of JRE's mandate approach comes from both the left (heavy-handed, a sop to insurance companies) and from the right (financially reckless), but none of the criticism holds up. I'm going to quote at length from an article by one of the most respected healh care experts, Lem N. Nichols, but I suggest everyone read the entire thing. If you do, you will, I think, hestitate before dismissing the idea of a mandate. Nichols points out not only that a mandate is necessary for universal coverage; it also contains costs. Under Obama's approach, by contrast, insurance companies will still have an incentive to discriminate.
Mandates make markets work better. Yes, you read that correctly. Markets need help sometimes. Voluntary insurance markets are inherently unstable, because people with more expensive health risks think community rating (charging the same price to everyone) is a bargain for them, while "young immortals" -- low-risk folk, usually young and healthy, who don't expect to use much health care -- think community rates are a bad deal for them. Both groups are right. So either community rates rise continuously (as more good risks drop out as rates rise, over and over) or, more commonly, insurers persuade state legislatures to let them underwrite differential risks and price (or deny) coverage according to preexisting conditions, age, and other criteria. Talk about moral hazard, wherein a behavioral decision is affected by the presence or absence of insurance! The incentive for an individual insurer to err against covering someone with a costly condition is very large.
Mandates go a long way toward correcting this "adverse selection" problem by putting everyone in the same risk pool. If everyone is required to buy, then insurers worry far less about attracting a disproportionate share of sicker patients, because the reluctant "young immortals" are buying, too. So the excess resources they now devote to underwriting and targeted marketing will be largely redundant and disappear.This is why John Sheils of The Lewin Group concluded that Senator Wyden's plan achieves such great administrative savings -- insurers will voluntarily disarm if everyone has to buy, and then the rest of us can stop paying them to figure out how to legally deny coverage to the sick.
In turn, mandates make community rating, the fairest pricing system by far, actually sustainable, because enrollees will not be churning in and out of the market anymore. The lower administrative costs will make insurance more attractive to high-risk and low-risk alike. And mandates will bar them from saving a few bucks by voluntarily joining the ranks of the uninsured, as some "free riders" have been known to do from time to time.
These "free riders" are people who can afford health insurance but choose to spend their money in other ways and thereby gamble that public hospitals will treat them when disaster strikes -- which it does, with actuarial precision. They were the original targets of Romney, and while they are a minority of the uninsured, they do impose costs on the rest of us, even on those who can't afford health insurance but pay taxes to support the public hospitals. So mandates make free riders pay their fair share. In a society that is not willing to deny all care to all who are not insured, mandates are the only way to achieve fair participation from this population.
At the same time, the economics literature is abundantly clear that no pure subsidy program will entice a majority of the uninsured to sign up for health insurance; the price responsiveness of health insurance demand is just too low. Free riders are not going to buy willingly at any price, low income folk can't afford to pay much at all on their own, and high income individuals will buy at virtually any price.
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