Health Care And The Wonk Gap

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JONATHAN CHAIT JANUARY 18, 2011

Health Care And The Wonk Gap

One of the unusual and frustrating aspects of the health care debate is the sheer imbalance of people who understand the issue at all from a technical standpoint. Even the elite policy wonks of the right make wildly incorrect claims about the issue. Here, for instance, is National Review and Weekly Standard health care writer Yuval Levin defending the Republican Party against Paul Krugman on the "doc fix":

Krugman points to a House Republican analysis of the costs of the health-care bill and then insists that the first and foremost argument in that analysis has to do with the “doc fix” to Medicare—the fact that the support of doctors’ groups for passage of Obamacare was bought with the promise of a long-term repeal of cuts to doctor payments but the cost of that promise was not factored into the cost of the final bill.

I've written about this a million times, and it's pretty simple. In 1997, Congress enacted a change to the formula for reimbursing doctors under Medicare. The change accidentally slashed physician pay far lower than intended. Congress has been cancelling out the reimbursement cut ever since. Republicans constantly claim that the cost of continuing to do so -- which isn't really a cost, just a failure to capitalize on an unintended future saving -- is part of the "real" cost of the Affordable Care Act. Or, like Levin, they claim that Democrats "bought" the support of doctors by promising a long-term repeal of those cuts.

It's true that the House Democrats briefly considered, but ultimately declined, to include the cost of a long term doc fix in a version of the health care bill. But this has nothing to do with anything. The cost of the doc fix exists utterly irrespective of the PPACA. If you repealed the bill, the cost of the doc fix would be exactly the same. (And, indeed, the GOP repeal bill does nothing at all to change that cost.) Anybody who endorses this claim is announcing to the world either that they do not understand the issue or that they're willing to make things up to advance their cause. It's a basic litmus test of seriousness, and the number of Republican-aligned commentators or analysts who pass it could fit into a cubicle.

Levin further argues, "Even with these assumptions, neither the CBO nor the Obama administration’s own CMS actuary argues that the law will actually reduce health-care spending or the rise of health-care costs." Again, false. Let me quote the CBO:

CBO expects that enacting both proposals would generate a reduction in the federal budgetary commitment to health care during the decade following the 10-year budget window—which is the same conclusion that CBO reached about H.R. 3590, as passed by the Senate.

Likewise, CMS finds:

For 2015-19, national health spending is now projected to increase 6.7 percent per year, on average -- slightly less than the 6.8 percent average annual growth rate projected in February 2010.

So why would Levin say that those reports find that health care costs will rise faster when in fact they find that they will rise slower? It's again a very basic confusion between level and rate of growth. The Affordable Care Act provides coverage to 30 million people who don't have it. That raises the level of health care spending. But the bill also contains numerous mechanisms to reduce the rate of growth over time. Ezra Klein has a handy chart:

Both CBO and CMS find that cost growth continues to decline after 2019. The level of spending rises but the trajectory goes down. Levin has every right to disagree with those analyses. But his claim that they find the bill won't reduce the rise of health care costs is simply false.

Most people are not policy wonks. We really on trusted specialists to translate these details for us. This is true as well of elected officials and their advisors. Part of the extraordinary vitriol of the health care debate stems from the fact that, on the Republican side, even the specialists believe things that are simply patently untrue. As with climate change and supply-side economics, there isn't even a common reality upon which to base the discussion.

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posted in: jonathan chait, weekly standard, congress, medicare, republican party, paul krugman

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