More Disinformation From Paul Krugman

Stanley Feld M.D., FACP, MACE

I
just finished watching the movie “Wag The Dog” starring Dustin Hoffman, Robert
DeNiro, Anne Heche, and Woody Harrelson. It is movie worth seeing again to
understand the Obama administrations campaign to promote Obamacare.

 Idiom
Definitions for 'Wag the dog'

To
'wag the dog' means to purposely divert attention from what would otherwise be
of greater importance, to something else of lesser significance. By doing so,
the lesser-significant event is catapulted into the limelight, drowning proper
attention to what was originally the more important issue.

Just days before a presidential election, a Washington,
D.C. spin doctor, distracts the electorate from
a sex
scandal by hiring a Hollywood film producer to construct a fake war with Albania. 

Paul
Krugman’s recent Obamacare article contains multiple misdirections and
half-truths. It offers fictitious examples that when stitched together sound as
if Obamacare is the greatest thing that ever happened to the American people.

Nothing
could be further from the truth.

Paul
Krugman declares that healthcare reform has worked in Massachusetts since 2006.
Therefore, Obamacare, which is essentially the same program, can work in the
rest of the nation.

“Massachusetts has had
essentially this system since 2006; as a result, nearly all residents have health
insurance, and the program remains very popular. So we know that ObamaCare —
or, as some of us call it, ObamaRomneyCare — can work.

Does
Massachusetts’ healthcare reform really work?

It
is true that nearly all Massachusetts residents are insured. The Massachusetts
government subsidized healthcare insurance sold in the Massachusetts exchange.
Physicians’ and hospitals’ reimbursement is only about 10% more than what Medicaid pays.

Massachusetts
physicians seem to be less willing to see the newly insured (with exchange subsidies) than Medicaid
patients even though the reimbursement is 10% more than they recieve for
Medicaid patients.

Physicians
are also less likely to accept Medicaid patients than privately insured
patients. This has resulted in a physician shortage for recipients of Medicaid.

In
Worcester Massachusetts there is a 3 months wait to see a primary care
physician. There is scalping for physician appointments in Worcester.

Patients
make appointments and then sell those appointment times to other patients that
have to see a physician quickly. The other option is to go to the emergency
room.

Many
of the healthcare policy wonks that wrote the Massachusetts law wrote the
Obamacare law. These same healthcare policy wonks believed that once everyone
was insured, patients would go to the doctor’s office for primary care rather
than to the hospital emergency room.

There
has been a decrease in the demand for care as a result of a decrease in the supply
of physicians. The result has been that hospital emergency room
traffic is higher today
than before health reform in
Massachusetts.

There
has been an increase in community healthcare centers manned by physician substitutes.
This traffic to community health centers is almost one-third higher than it was
before reform.

The
time it takes to get medical care is growing in every city and town in Massachusetts.  The wait to see a new doctor in Boston today is two months.  This is the longest wait in the entire
country.

The
only thing that has changed in Massachusetts is the cost of healthcare. A few
years ago the federal government had to bail out Massachusetts before it went
bankrupt. Massachusetts received 8 billion dollars for healthcare reform from
President Obama.

 

“On
balance, the only thing that seems to have changed in Massachusetts is that
patients are waiting longer. They are going to the same places to get care that
they went to before. They are getting the same care
from the same providers. In the
process, more money is being moved around. A lot more money.”

Paul
Krugman states “There are, however,
millions of Americans who don’t receive insurance either from their employers
or from government programs.”

I agree this
must be fixed. However, I believe Obamacare is going to make things worse.

“ They can get
insurance only by buying it on their own, and many of them are effectively shut
out of that market.”

This is
also true. However you cannot force businesses to do things they do not want to
do as Obamacare is attempting to do. You also cannot increase medical benefits
without raising healthcare insurance prices and permit the insurance industry
to take 40% off the top.

The
healthcare insurance industry will be taxed for every policy sold and the cost
will be passed on to consumers.

You also
cannot stop excessive demand for healthcare unless you provide incentives to
consumers to decrease demand. Obamacare provides incentives to increase demand
by expanding healthcare entitlements. The result will be a further increase in
federal and state taxes.

The tax
increase will further decrease investment and in turn increase unemployment.

Meanwhile
all large and small companies are decreasing full time employment to under 30
hours a week to avoid penalties for not providing healthcare insurance.

Who is
getting stuck?

Ordinary
consumers are getting stuck. Things are getting worse, not better.

In some states, like California, insurers reject applicants with past
medical problems. In others, like New York, insurers can’t reject applicants,
and must offer similar coverage regardless of personal medical history
(“community rating”).

 Community rating
is a concept associated with health insurance, which
requires health insurance providers to offer
health insurance policies within a given territory at the same price to all
persons without medical
underwriting, regardless of their health status.

Pure
community rating prohibits insurance rate variations based on demographic
characteristics such as age or gender, whereas adjusted or modified
community rating allows insurance rate variations based on demographic
characteristics such as age or gender in a region or city.

It has nothing to do with
requiring the issuing of healthcare insurance.

 He says by having community ratings,
“it leads to a situation in which premiums are very high because only those
with current health problems sign up, while healthy people take the risk of
going uninsured.”

This is a misinformed statement. If there are
many young people in a community the insurance rates should be lower regardless
of whether they have insurance.

 The
claims experienced by the healthcare insurer will be higher if the young people
do not sign up for insurance. Therefore the healthcare industry wants to set
prices on claims not community performance.

Again,
the government should not be able to force consumers to purchase a product they
do not want. The Supreme Court said the government could tax consumers if they
do not purchase healthcare insurance.

If the
tax is 10% of the cost of insurance and you cannot afford the insurance you
would pay the penalty and forgo the insurance. A consumer would also try to
avoid the penalty.

Paul
Krugman proclaims the principles Obamacare demands.

Obamacare closes this
gap with a three-part approach.

 First, community rating everywhere — no more
exclusion based on pre-existing conditions.

This is
good but costly unless you change the profit structure for the healthcare insurance
industry.

Second, the “mandate”
— you must buy insurance even if you’re currently healthy.

This is
against the law.

Third,
subsidies to make insurance affordable for those with lower incomes.

This
is also O.K. but it will create a situation that is unsustainable for the
federal government. The federal government is going to want to stick the
unsustainable costs on to the states after the first three years of complete
federal funding. The federal government cannot afford the first three years.

Paul
Krugman then goes on to play the very effective blame game.

“Some people are too
poor to afford coverage even with the subsidies. These Americans were supposed
to be covered by a federally financed expansion of Medicaid, but in states
where Republicans have blocked Medicaid
expansion, such unfortunates
will be left out in the cold.”

I thought
the Obamacare was going to set up health insurance exchanges in states that
refused to participate.

 Paul Krugman goes on to say,

“There will
probably be a lot of administrative confusion as the law goes into effect,
again especially in states where Republicans have been doing their best to
sabotage the process.”

“States like
Texas whose politicians are doing their best to undermine it, the sheer mean-spiritedness
of the Obamacare opponents will become ever more obvious.”

Maybe,
just maybe Texas and the governors of the other 24 states that are not
participating because they are smart. They see the coming train wreck. They
understand that Obamacare is unsustainable. They do not want to be stuck with
the obligation to adopt an unsustainable program. They want to avoid bigger
state deficits. They want to avoid raising state taxes for a program that
cannot work.

If the
Obama administration wants to execute the program let it do it on its own.

The Obama
administration has not taken steps to set up health insurance exchanges in
states that are not participating.

They are
taking steps to develop a campaign to promote Obamacare and steps to blame the
states that are not interested in participating in its demise.

Paul
Krugman is a pawn for the Obama administration. He is helping the
administration construct a similar blame game scenario that had been so
effective in passing Obamacare and in winning reelection for President Obama.

The states
that are not participating should organize and offer a strong offense
describing the obvious reasons they are not participating in the health
insurance exchanges.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone

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