Economics, Entitlements

Maybe it’s Paul Krugman who’s lying about Obamacare

Paul Krugman says the opponents of the Affordable Care Act are liars. According to Mr. Krugman, “To understand the lies, you first have to understand the truth. How would ObamaRomneycare change American healthcare?  For most people the answer is, not at all. In particular, those receiving good health benefits from employers would keep them” (emphasis added).

I don’t wish to put words into Mr. Krugman’s mouth, but this claim sounds remarkably similar to President Obama’s oft-repeated promise “If you like your healthcare plan, you can keep your healthcare plan.” But even at the time it was uttered in August 2009, PolitiFact.com scored this claim as only half true. When pressed on this promise, President Obama gave a lengthy answer that PolitiFact summarized as follows: “Obama’s saying that the government will not force employers to change their health plans.” That was then, this is now. What we know now that the law has actually been passed and some of the regulations have been written, is that President Obama’s 2009 assertion is factually false.

One can quibble over whether the president was lying when he made this claim (which implies knowingly stating a falsehood) or was merely mistaken in guessing the contents of the final bill and attendant regulations. But for Mr. Krugman to, in essence, repeat this claim in 2012 is a flagrant falsehood. If Mr. Krugman is so ignorant of the projected effects of the Affordable Care Act, as codified in official estimates issued by the Congressional Budget Office, the Medicare actuary, and the regulations issued by the Obama administration himself, then he has no business pontificating about the “truth” of the Affordable Care Act on the pages of the New York Times. If he is aware of these projected impacts, then an impartial observer might be forgiven for concluding that he is lying. You be the judge.

Millions of Americans will be adversely affected by Obamacare, such as the 7.4 million elderly individuals who will lose their Medicare Advantage Plans by 2017, according to the Medicare actuary. But let me focus only on employer-based coverage, since that is where Mr. Krugman makes his most concrete (i.e., empirically testable) claim. If you like your current health plan, can you keep it? To borrow a phrase from Mr. Krugman, “For most people the answer is, not at all.” This, of course, is the precise opposite of what Mr. Krugman and the president have asserted. They would have you believe that most of the 169 million Americans with employer-based health coverage will be able to keep their current coverage (if they like it). Nothing could be further from the truth.

First, every single health plan in America, even those that are “grandfathered” from having to comply with the thicket of Obamacare regulations, has been forced to make changes in coverage. These include prohibition of pre-existing condition exclusions, prohibition on excessive waiting periods, no lifetime or annual limits, and prohibition on rescissions, each of which will add to the premium cost of insurance (if such provisions were cost-free, employers would have added them years ago).

Second, federal regulators have projected that only one in three small employers (under 100 employees) and half of large employers will remain grandfathered by 2013. In short, official government figures explicitly acknowledge that more than half of all employees will not be able to keep their current coverage. The grandfathering rules are far too strict to allow this. Worse, the regulators further concede that as few as one in five small employers and one in three large employers might qualify for grandfathered plan status under the rules they have issued. In that case, more than two-thirds of workers will have lost their current coverage by 2013.

Finally, looking beyond 2013, the restrictions on grandfathered plans are sufficiently binding that proponents of the ACA fully concede that “eventually, if the ACA remains in effect, grandfathered plans will disappear.” Knowing all this, do you feel confident in your ability to keep your current coverage? More to the point, does a claim that ObamaRomneycare will not change American healthcare for “most” people sound even remotely truthful?

Paul Krugman has no monopoly on deceptiveness when it comes to the Affordable Care Act. Just this week, Jonathan Tobin has observed: ‎”President Obama’s willingness to falsify the facts about a personal tragedy in order to make a political point speaks volumes about not only his cynicism but also his character. It’s important to remember that this is no misunderstanding but rather a bald-faced lie.”

But perhaps Mr. Krugman could set an example to which his students and readers could aspire.

Mr. Krugman, lying in the public square is despicable, inexcusable behavior. Please stop.

Christopher J. Conover is a research scholar at Duke University’s Center for Health Policy and Inequalities Research, an adjunct scholar at AEI and affiliated senior scholar at the Mercatus Center at George Mason University. His new book American Health Economy Illustrated, was released in February 2012 by AEI Press.

7 thoughts on “Maybe it’s Paul Krugman who’s lying about Obamacare

  1. This excellent article, and others like it, argue the effect Obamacare will have in the future on whether I can “keep my plan”. I wish these articles would include the dramatic changes that have already occurred due to the threat of Obamacare’s impact. I have the same employer-based healthcare with the same provider I had two years ago before Obamacare passed. I have not changed my plan in any way and would happily “keep it”. On paper I do “keep” my plan. In reality, my plan has altered for the worse. Obama is technically telling the truth about my situation, but the details show what a falsehood he is peddling. My great insurance plan is gone, replaced with a more mediocre plan on which I will fondly recollect in about two more years if Obamacare is not repealed.

  2. Dear Mr. Conover,

    Of course, your column is 100% right. However, you have selected a rather easy target; it is generally recognized that the way to tell if Mr. Krugman is lying is to simply look for his picture in the NYT. If it is there, then so are the falsehoods.

    • Let me reiterate that Mr. Krugman is not solely responsible for the lies told about the Affordable Care Act. “In a 2010 column titled “Obamacare’s unkeepable promises,” I compiled the top Obamacare lies that the president and other Democrats deployed. As I’ve said before, we did not get here because of simple distortions or exaggerations or even misrepresentations. Obamacare is the product of statements known by their makers to be untrue and meant to deceive – lies. Two years after the president signed his health care takeover into law, the enormity of those lies continues to grow.”
      http://www.washingtontimes.com/news/2012/mar/21/obamacare-its-a-big-disastrous-deal/

  3. You and Mr. Krugman should have a debate. Everyone is giving different information, it’s hard to know who’s lying. I think public debate is the only way to test out what is factual and what is not: putting both arguments face to face.

    • I’m happy to debate Paul Krugman any time. But I actually think a written ‘debate’ is more informative. I have explained and provided links to all my sources. For example, The estimates of how many employers will retain qualified grandfathered plans are official administration projections, not something I calculated on my own. Readers can check the original source to confirm I have not mischaracterized these conclusions.

      I think it is incumbent on Mr. Krugman to explain how, in light of these various official government estimates, he arrives at the conclusion that “for most people” the Affordable Care Act will change their healthcare “not at all.” This does not strike me as a truthful statement.

  4. Kathleen, Your employer based healthcare plan did not change because of the Affordable Care Act. It changed because your employer and the insurance company your employer uses changed it due to the rising healthcare costs that have risen so dramatically in the last 10 or more years. Insurance companies have been raising premiums which your employer has had to pay, either all or part. The choices employers have had in order to offer this benefit is either to have employees contribute more of their wages towards their premiums or for the employer to change their insurance policy towards less coverage if they can’t cover it or don’t want to cover it themselves.
    Many companies now are not offering this benefit to new employees. You should talk to your employer’s benefits manager or HR manager. But I think it’s unfair to blame this on Obama.
    The company I had been working for up until a year ago had changed our insurance carrier three times in three years to save money. And each time out coverage got worse. Since leaving that company, I had to acquire my own individual insurance on which I haven’t had a single claim for anything. But guess what? Six weeks after paying my second monthly premium, they raised it by 29%. I’m just glad I’m healthy. But you have to have it – right? And the insurance companies know this.

    • You’re right that not ALL of what Kathleen describes can be laid at the feet of the ACA. But it is equally erroneous to conclude that ACA played no role.

      A recent employer survey showed that “Employers report that their healthcare costs have increased by about 2-5%—mainly due to new mandates in the new health law such as requirements that young adults can continue coverage under their parents’ policies, first dollar coverage of routine services, and the removal of annual lifetime limits for “essential health benefits.” http://www.aei-ideas.org/2012/03/study-obama-healthcare-reform-raising-costs-forcing-workers-out-of-existing-plans/

      This same survey showed that “fewer than 30% of employers say they were able to maintain grandfathered status of their healthcare plans. This rapid loss of grandfathered status far outpaces Obamacare’s original estimates of what would happen. The preamble to the June 2010 regulations noted that by the end of 2011, the Obama administration expected 78% of employers would retain grandfathered status. By the end of 2012, they forecast that 62% would still be grandfathered, and by the end of 2013, 49% would retain their grandfathered status.”

      Thus, not surprisingly, the regulators were far too optimistic about the impact their rules would have as they played out in the real world. Which is to say that my use of official estimates paints a very conservative picture of the adverse effects of ACA.

      This is not unusual. In a study I did with Mercatus Center, we carefully reviewed the first 8 major rules issued under the ACA and found a systematic pattern of overestimating the rules’ benefits and underestimating their costs. http://mercatus.org/publication/beware-rush-presumption-part

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