Green Room

PolitiFact’s Biggest Lie

posted at 7:38 pm on December 17, 2010 by

The easy joke is that PolitiFact naming “government takeover of health care” as the 2010 Lie of the Year is PolitiFact’s biggest lie. I do not think that is true, for reasons which will become apparent below. However, there is plenty wrong with PolitiFact’s claim:

“Government takeover” conjures a European approach where the government owns the hospitals and the doctors are public employees. But the law Congress passed, parts of which have already gone into effect, relies largely on the free market:

Employers will continue to provide health insurance to the majority of Americans through private insurance companies.

• Contrary to the claim, more people will get private health coverage. The law sets up “exchanges” where private insurers will compete to provide coverage to people who don’t have it.

• The government will not seize control of hospitals or nationalize doctors.

• The law does not include the public option, a government-run insurance plan that would have competed with private insurers.

• The law gives tax credits to people who have difficulty affording insurance, so they can buy their coverage from private providers on the exchange. But here too, the approach relies on a free market with regulations, not socialized medicine.

PolitiFact reporters have studied the 906-page bill and interviewed independent health care experts. We have concluded it is inaccurate to call the plan a government takeover because it relies largely on the existing system of health coverage provided by employers.

It’s true that the law does significantly increase government regulation of health insurers. But it is, at its heart, a system that relies on private companies and the free market.

Let’s start with the straw man that “a ‘government takeover’ conjures a European approach where the government owns the hospitals and the doctors are public employees.” By this measure, there has been no government takeover of healthcare in countries like France or Switzerland. Even in England, most doctors, dentists, optometrists and other providers of local healthcare are self-employed, and contract their services back to the NHS. If PolitiFact wants to invoke the “European approach” to healthcare, it might help if they could accurately describe it.

Next, PolitiFact relies heavily on the fact that people — most Americans — will continue to be insured by private insurers. However, the government is projected to outspend the private sector on health care by 2012, before ObamaCare is even phased in — and as the government becomes the dominant purchaser of health care in America, it will surely have control above and beyond that legislated. Moreover, as Michael Kinsley (founding editor of Slate, which PolitiFact relies upon as an authority) asked about ObamaCare:

If the government requires insurers to accept all customers and charge all the same price, regulates all aspects of their marketing to make sure they aren’t discriminating, and then redistributes the profits to make sure that no company gets penalized unfairly, in what sense is the industry still “private”?

It’s an inconvenient point PolitiFact chooses not to address, but it gets worse:

The [law’s] rules governing medical loss ratios—which determine what percentage of an insurance company’s operating budget can be devoted to administrative costs and profit—were set at the maximum threshold at which the Congressional Budget Office would decline to include the cost of private insurance premiums in its cost estimates; crossing that threshold would have made the bill far more expensive. Currently, the ratios are set at 80 percent for the small group market and 85 percent for the large group market, meaning that insurers must make certain that either 80 or 85 percent of their budgets are spent on “clinical services.” Those ratios are as high as they can be while still leaving insurers some semblance of independence; if nationwide MLRs were set even a single point higher, according to the CBO, health insurance would constitute “an essentially governmental program.”

In other words, in the CBO’s view, the new health care law walked right up to the government-takeover line, but didn’t technically cross it.

Considering that any definition of a medical-loss ratio is inherently arbitrary, the fact that the Democrats gamed a judgment by the CBO is hardly conclusive of whether the private health insurance market should be considered (in the words of the CBO) “an essentially governmental program.”

PolitiFact places weight on the notion that ObamaCare lacks a government-run insurance plan. PolitiFact overlooks that most of the expansion of coverage in ObamaCare comes from sticking an estimated 16 million people on Medicaid — where recipients fare worse or no better than those who have no insurance at all. If MassCare is any indicator (and ObamaCare defenders love to compare it to RomneyCare), some of those new Medicare clients will be people dumped from employer-provided coverage. Indeed, ObamaCare immediately had employers planning to dump retirees in to Medicare (and those without the political juice to get a government waiver may yet dump them). The lack of a new government-run plan does not change the expansion of the already existing government health plans.

Then there are those “independent health care experts” PolitiFact consulted. One of them is “Princeton University professor Uwe Reinhardt, an expert in health care economics.” PolitiFact leaves out his $2,300 donation to Barack Obama. Here’s a bit more of the wit and wisdom of Uwe, to give you a flavor of how impartial he is on the subject of government-run healthcare.

Next up is Jonathan Oberlander, “a professor of health policy at the University of North Carolina-Chapel Hill.” Oberlander is in fact a political scientist who has written a great deal on the politics of the health care issue — which makes him about as much of an expert as I am. (At least Uwe Reinhardt has a Ph.D in economics.) Oberlander’s opinion that a single-payer government financing of health care is not “socialized medicine” tells you what his politics are.

PolitiFact also quotes Maggie Mahar, author of Money-Driven Medicine: The Real Reason Health Care Costs So Much. Well-known among those who follow the issue as a market-hating health care expert, I am not exactly shocked that she told PolitiFact what PolitiFact so obviously wanted to hear. PolitiFact neglects to mention that Maggie Mahar is a fellow at The Century Foundation, a progressive think tank. (They also fail to mention that Mahar’s educational background is in English literature.)

In contrast, PolitiFact dismisses the Heritage Foundation and the Cato Institute as conservative groups repeating a “lie” [Aside: Cato is libertarian, but we must all look alike to PolitiFact]. Thus, PolitiFact chose not to seek the advice of any experts affiliated with those groups, like Cato’s Michael Cannon, who argues that ObamaCare is a government takeover of the health care system. The closest to a Republican, let alone conservative, in PolitiFact’s interview list is Gail Wilensky, who coincidentally goes unquoted by PolitiFact.

The point here is not that PolitiFact’s claim is a lie, or that PolitiFact is biased (although the latter is fairly obvious). Rather, the point is that the question of whether ObamaCare is a government takeover of the healthcare system is one of political opinion, not a simple question of fact. Indeed, the difference in opinion between those whom PolitiFact labels as liars and the CBO is a percentage point or so.

Accordingly, PolitiFact’s Biggest Lie is the one left unstated — that a political judgment call can be easily labeled as a “lie” in the first instance. However, for practical reasons, I do not condemn that lie. After all, the establishment media — of which PolitiFact is a part — is still in the business of trying to manufacture consent to a center-left political narrative. PolitiFact exists largely as an attempt to deligitimize certain political opinions. We now know which political opinion most bothered the establishment in 2010. That is a valuable service to everyone.

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