Rhetoric Meets Reality on Health Law

Ben Smith at Politico has a great scoop on a recent strategy session hosted by the Herndon Alliance, a left-wing umbrella group that works to promote the new health care law. According to Smith, as the result of polling and focus groups, these health reform supporters are calling for a change in communications strategy. Apparently the American people are not being persuaded by the ongoing communications campaign designed to promote the idea that the new law will lower costs for families and the government.

Key White House allies are dramatically shifting their attempts to defend health care legislation, abandoning claims that it will reduce costs and deficit, and instead stressing a promise to "improve it."

That the ObamaCare allies would consider abandoning these defenses is stunning since it is an implicit admission that the new health care law will not produce those purported results. However, it comes as little surprise to many policy analysts.

During the year long debate preceding the passage of the health care bill, there were numerous and consistent studies that demonstrated premiums would in fact increase for families, contrary to the Administration’s claims that family premiums would be lowered by $2,500 per family. Last November, the Congressional Budget Office released a paper finding that the new mandates – purportedly designed to make insurance more comprehensive – would also make it more costly. To many, this was expected and sensible. Intuitively, more comprehensive policies are more expensive, and eliminating competition from less comprehensive (but inexpensive) policies would drive up costs. For example, the heaviest regulations for comprehensive coverage fall on the individual market for those buying insurance directly rather than receiving it from an employer. CBO found that those premiums would increase 10%-13%. “Average premiums per policy in the nongroup market in 2016 would be roughly $5,800 for single policies and $15,200 for family policies under the proposal, compared with roughly $5,500 for single policies and $13,100 for family policies under current law.”

On the issue of cost to the government, reports from the CBO and the Medicare actuaries have been equally clear. Supporters of the new law are quick to tout the fact that it was scored by CBO as saving over $100 billion dollars over the next ten years. As noted by TIME, Democrats were anxious to ensure the CBO gave the bill a favorable score- efforts that may have been wasted:

Democrats worked hard to get a favorable score on the legislation from the Congressional Budget Office, figuring a big selling point of the law would be that it reduces the deficit. This part of the sales pitch is apparently not as helpful as they predicted.

Unfortunately for reform supporters, this strategy may have been ultimately doomed since a wide spectrum of policy analysts broadly (and rightly) predicted the bill was likely to be a budget-buster. Because health care costs and policies are consistently and heavily examined, “pulling the wool” over the eyes of the policy community with a strong-armed CBO cost estimate was unlikely to be convincing. In addition, the intuitions held by every-day Americans also proved correct. Americans are generally skeptical of promises that government programs will save money, and health reform supporters made claims which sounded too good to be true. For example, the law is touted to be paid for solely though cuts to Medicare, and at the same time advocates claim those cuts will not result in reductions in any needed care. As predicted, the Congressional Budget Office and the Medicare Actuary have both concluded otherwise. In another instance, though advocates claimed otherwise, cuts to physicians payments embedded in the bill to help offset costs will actually result in doctors dropping Medicare patients or going out of business entirely. CBO has ultimately confirmed that if you add the new costs for increasing these physicians payments (rather than the cuts promised), the result is to turn the billions of savings into billions of new debt.

Unfortunatley, it's not only cuts to doctor payments that labor under this miscounting. The steep cuts in the Medicare Advantage program will result in reductions of up to half of the extra benefits Medicare Advantage beneficiaries enjoy, according to CBO. Many insurers will likely leave the program outright rather than endure these cuts, rendering beneficiaries of the Medicare Advantage program much worse off than advocates of the health care law would have had them believe.

The final message in all of this is put well by TIME.

What's significant here is that the Democrats' messaging strategy on health care so far has been basically a waste of time and there's a sizable effort underway among advocacy groups to salvage that effort, change strategies and possibly win over some more voters between now and the November mid-terms.

A well-funded media campaign, begun by the Administration and supported by a host of allied organizations, was ultimately unsuccessful at disguising some simple math: a massive spending bill will end up being very costly. Unfortunately, this is simply highlighting what many Americans have known all along.