THE PLANK DECEMBER 3, 2007
By now, almost everybody in Iowa and
quite a few people beyond it have heard Hillary Clinton or John
Edwards attack Barack Obama over his health care plan.Edwards and Clinton would both require
every American to obtain insurance, a proposal known to policy wonks
as an “individual mandate.” Obama would require all children to
have insurance, but not all adults. Citing that difference, Edwards
and Clinton have said that Obama's plan could leave as many as 15
million people without insurance.
Curious where they that number came
from? Well, it seems to come from me. Sort of.
The day Obama unveiled his plan, back
in May, I wrote an article about it. I praised the plan as an
ambitious, meaningful proposal that would likely improve the lives of
millions of Americans. I praised Obama himself for showing a genuine
commitment to this issue. Then I criticized him for not including a
mandate, which one of his rivals, Edwards, had already done. (Clinton
hadn't yet unveiled her plan.) In other words, I said that Obama's
plan was good but not great—the same verdict that other close
observers of health care policy, like Ezra Klein and Paul Krugman,
In the course of making my case, I
thought it important to convey some sense of scale. So, based on my
reporting, I suggested somewhere around 15 million people—or
roughly a third of the people now without insurance—might still
lack coverage, even if Obama's plan were implemented.
That magic 15 million figure has since worked its way
into the campaign. Edwards was the first to invoke it, during a
televised debate in early June. But it's Clinton who really put the
estimate into play in mid-November, when she started using it as
part of her attacks on Obama's health care plan—and distributing
my article as proof of its validity. Most recently, Clinton cited the
figure and my article on Friday, when calling upon Obama to retract
an advertisement in which he promises his plan would cover everybody.
Mandates raise lots of interesting and
complicated questions, about which I hope to say something more intelligent shortly. In the meantime, though, here's the
explanation of how I got that figure—and whether, six months
later, it still seems sound to me.
It's pretty much conventional wisdom
that, without a mandate, a substantial portion of Americans would
remain uninsured. But to come up with a figure, I relied heavily on
conversations I had with Jonathan Gruber, an economist at the
Massachusetts Institute of Technology.
Gruber is a highly regarded economist
who specializes in precisely these kinds of issues. Although he
served in the Clinton Administration and is generally identified with
Democrats, politicians of both parties have sought his advice. Back
when Governor Mitt Romney was setting up his universal health care
plan for Massachusetts, he brought Gruber into the process. Today,
Gruber continues to serve on the board of the Connector, which is
overseeing the Massachusetts plan.
The reason so many people ask Gruber's
advice is that he has developed a model, based on past data, for
projecting how various policy changes will affect the number of
people who obtain health insurance. It is similar to the model used
by both the Congressional Budget Office and the Treasury Department.
(You can read more about him in this Washington Post story.)
Since all three of the leading Democratic contenders, including
Obama, were known to be have sought his input this campaign cycle, I
figured that made him a particularly reliable source of guidance.
Gruber told me that his projections
showed that, without an individual mandate, a program of very
generous subsidies and market reforms would bring in close to half
the uninsured population. Adding a child mandate, he said, could
bump it to two-thirds. Since Census figures showed around 45 million uninsured, I asked if that meant
roughly 15 million would still lack insurance. He said that sounded
about right. I put that figure in my story (although, in my quick
translation of our conversation, I explained the step-by-step math
incorrectly—saying that the starting baseline for coverage without a mandate was one-third, not one-half). I didn't attribute this to Gruber directly, though I'd cited his work elsewhere in the article, since that
part of our discussion had been on background. He's since made these
It was a crude, back-of-the-envelope
calculation based on a projection. And all projections contain some
uncertainty because they make assumptions, some of which might turn
out to be wrong. In other words, the figure should not be treated as
On the other hand, figures like these also represent the best available information we have for evaluating policy proposals. And a projection like Gruber's is no less reliable,
certainly, than a lot of the other numbers campaigns routinely throw around.
Take, for example, Obama's promise that his plan will require only
$50 to $65 billion a year in new revenue once fully phased in—because he anticipates
generating huge savings from better management of disease and use of
information technology. It's a number the campaign has provided. It's
reasonable to put at least some stock in it because they likely reflect the influence of David Cutler, a Harvard economist who studies health care
extensively and is also widely respected for his intellect and
honesty. But if you're going to take that figure seriously, then, it
seems to me, you certainly have to take Gruber's figures seriously, too.
And, more important, Gruber's views are
hardly out of the mainstream. Over the last few days, I've had the
chance to do something I couldn't with that first-day story: consult
several other leading authorities. One of them is Len Nichols, an
economist who worked on the 1993-94 Clinton health care effort and
today heads up the health policy project at the New America
reasonable model out there ... will show you that the kind of
subsidies that we could do, 50 percent or so, are going to get you
half," he said. "The way you go from half to 15 [million] is the kid mandate.”These days, Nichols is probably the most visible promoter of individual mandate schemes in Washington. And, for those who want to see hidden agendas at work, Gruber's advocacy of individual mandates is also well-known. Then again, in both cases, they've reached that conclusion based on their respective research histories. If they have a bias, it's in favor of a policy as opposed to a candidate—a policy that they happen to believe is right.
Still, for the purists out there is always somebody like John Holohan,
who directs the Urban Institute's Health Research Center and, as best as I can tell, has no direct connection to the presidential campaign. Holohan commands universal respect, too, having worked on these sorts of problems for two decades. And he's pretty much where Gruber and Nichols are on this question. Without a
mandate, he told me, “Obama would still leave about 22 million, 23
million, but he has a mandate for children, about 9 million uninsured
kids, so assuming you get most of them, you get pretty close to 15
Just to be sure this sentiment wasn't
purely a project of Washington group-think, I contacted Altarum, a
non-profit health care research institute based in Ann Arbor, Michigan. They hadn't
modeled a plan like this specifically and warned that, without more
details, they couldn't be precise. But with those caveats out of
the way, analyst George Miller and economist Charles Roehrig sent me
an e-mail explaining that "We've done some very crude hand calculations that suggest that the estimate of 15 million uninsured under an Obama-like plan (no individual mandate, coverage of all children, incentives) is in the right ball park."
By the way, while the Clinton campaign had been circulating my article as evidence to back their claim, an official later told me that they weren't relying on me exclusively. Before using the number publicly, they'd consulted experts independently—presumably, some of the same ones I did.
For the record, the Obama campaign
continues to dispute the 15 million figure, arguing the estimate is based
too heavily on a generic reform package and not a plan with the
specific provisions that Obama has. They are particularly
enthusiastic about the potential for automatic insurance plan
enrollment at the workplace to boost participation. One economist,
Sara Collins of the Commonwealth Fund, has gone on the record as
saying the 15 million figure sounds too high. (She told that to
Factcheck.org, which ran a story on this right after the controversy
started). Holohan, too, told me that auto enrollment might help bump up
the participation, though he couldn't say by how much. Jacob Hacker,
a Yale University political scientist (and occasional TNR
contributor) who has also been working with all three campaigns,
Gruber, Nichols, and Roehrig, on the other hand,
were more dubious that the new enrollment practices would change much. Among
other things, Gruber explained, his two-thirds estimate already made
optimstic assumptions about Obama enrollment practices. In addition, most of the evidence on automatic
enrollment comes from studies of 401K retirement accounts. (Research
has shown that when you enroll people automatically but let them opt
out, they are much more likely to sign up than if you simply give
them the option to enroll. In other words, it's the default choice that matters.) And it's not necessarily true, as Roehrig noted, that people will treat health
insurance the same way.
My own opinion—and it is only an opinion, albeit one by somebody who's spent a lot of time trying to figure out health care policy—is that Gruber, Nichols, and Roerhig
are probably more right than wrong. Automatic enrollment could be a
huge help, but it seems like the crude two-thirds estimate already
takes that into account, at least partly. (Also, the paperwork for the Obama plan doesn't actually say anything about automatic enrollment, although Cutler referred to it—a bit obliquely—in this article posted after Obama first unveiled the plan.)
So I guess I'm right back where I started: 15 million is a very, very rough estimate of how many people might still be uninsured if Obama's plan became law. But these are the figures we use in campaigns. And at least a few well-respected authorities, none of them tied to one candidate, think it makes sense.
Of course, that's only half the story—as the Obama campaign will eagerly tell you. For the last few days, they have been concentrating
on a different argument altogether: that the estimates of their rivals'
plans are too optimistic. Austan Goolsbee, a top Obama advisor who is
also an economist at the University of Chicago, has written
a memo arguing that Obama's plan may actually cover more people
than either of the rival plans would—once you take into account
that the Clinton and Edwards plan would leave out millions, too.
Is he right? Is this really basically a wash? My best guess on that very
important question is coming shortly.
Note: The world of health policy is
small, so I've gotten to know virtually every expert cited in this
article—including Cutler, Gruber, Hacker, and Nichols—well
enough to call them friends. I don't think that biases me,
particularly since they occupy different sides in this dispute, but I
thought I should make that clear.