A Reply to the Cato Institute’s Report on Healthcare Reform – Part 1

This week, the Cato Institute released a 52-page report on health care reform titled: Bad Medicine: A Guide to the Real Costs and Consequences of the New Health Care Law.

The tract was written by Michael Tanner, a senior fellow at the Institute, and it rests on the thesis that the Patient Protection and Affordable Care Act (ACA) is both Unaffordable and Unfair. Inevitably, Tanner’s claims about affordability are shaky; in truth no one can project how much reform will cost over ten years—and how much it will save. There are too many variables involved. Nevertheless, Tanner seems sure: the legislation will add to the deficit, he asserts, and force insurance premiums higher. Moreover, he stamps the legislation “unjust”: it would turn private insurance companies into regulated “public utilities,” forcing them to insure sick people, while “redistributing income” from families earning “over $348,000” to families earning “$18,000 to $55,000.”  Ultimately, he argues, reform represents yet another step toward transforming the U.S. into a “Nanny State.”


Why a 52-page report on health care reform now? Tanner makes his purpose clear in the Introduction where he suggests that conservatives will make the new health care legislation the “centerpiece of Republican campaigns this fall,” as they lobby for  repealing the Affordable Care Act, or at the very least, replacing it. Bad Medicine is meant to serve as a playbook for those who hope to kill reform.   

With that in mind, The Century Foundation decided that the document deserves scrutiny.  In the weeks ahead, I will be analyzing and rebutting the report’s many arguments against individual and employer mandates, insurance regulation, subsidies, reductions in Medicare spending, and the CLASS Act, a much-needed national long-term care program.

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Cherry-Picking the Polls

To buttress the argument for repeal, the report begins by declaring that the reform “legislation remains deeply unpopular.  Recent polls show substantial majorities support repealing it," Tanner writes.. For example, "in late May a Rasmussen poll showed that 63 percent of likely voters supported repeal, with 46 percent ‘strongly’ supporting repeal. Just 32 percent wanted to keep the law.”

To illustrate the point, page 2 of Bad Medicine features this chart:

Rasmussen Poll –May 22-23

Rasmussen

Source: Rasmussen Reports, poll of 1,000 likely voters, May 22–23, 2010, margin of error +/- 3 percentage points, with a 95% level of confidence.

Some might object that Cato is offering a Rasmussen poll as its only evidence.  Many liberals claim that Rasmussen tilts to the right. Last year, even TIME magazine called Rasmussen a “conservative-leaning polling group.” The Center for Public Integrity points out that Scott Rasmussen, the president of the organization was a paid consultant  for the 2004 George Bush campaign.

Nevertheless, for the moment let’s accept Cato’s use of a Rasmussen survey.  The group’s work is generally recognized as “reliable,” even if, as blogger Nate Silver notes, its “issue-based polling” tends to “elicit responses that are more conservative than those found on other national polls.”  

What bothers me is not so much the pollster, but the fact Tanner is using old numbers. He has reached back to May to find a poll that squares with his thesis. Keep in mind that Rasmussen has been asking the question about repealing the healthcare legislation every week since the bill passed in March.  Bad Medicine was released July 12. Why didn’t Tanner include June numbers? Instead, he  hand-picked the one poll, over a seventeen week span, that shows support for repeal running as high as 63%.   

In May, Rasmussen commented on the spike: “Support for repeal of the new national health care plan has jumped to its highest level ever. Prior to today, weekly polling had shown support for repeal ranging from 54% to 58%.  . . . this marks the first time that support for repeal has climbed into the 60s. It will be interesting to see whether this marks a brief bounce or indicates a trend of growing opposition.”

Indeed, the May 22 poll turned out to be a “bounce”—merely a blip on the screen. Over the next five weeks, the number of respondents who favored repeal fell, while opposition to killing the bill rose.

Rasmussen Polls on Repeal of Health Care Reform: March –July

Ramussen_July

By late June, as the table above reveals, just 52% of voters chose repeal—down from 63% in that one May poll– while 40% were opposed. The most recent Rasmussen numbers, released Monday, July 15, confirms where public opinion is heading.  As the pollster notes, “This is the second lowest level of support for repeal in 17 weeks of surveying since the health care bill was passed by Congress. It marks what appears to be a continuing downward trend in support for repeal since June.”  

The More Americans Learn About the ACA, the Better They Like It

A survey taken at any particular point in time is not terribly meaningful. Trends, on the other hand, tell us where minds are moving. As I have argued in the past, ever since the reform legislation passed Congress on that Sunday evening in March, multiple polls have tracked growing support for the legislation.   
 
Recent polls that go beyond the “favor/oppose’” formula to ask more probing question also demonstrate that the public is keeping an open mind. For example, in June, a Kaiser Foundation poll discovered that 60% of Americans either support the ACA or prefer that it “be given a chance to work with Congress making revisions as needed.’” Just 27% favored repeal. 

A June NBC/Wall Street Journal poll confirmed the wait-and- see attitude.   When pollsters asked: “Would you be more likely to vote for a Democratic candidate for Congress who says we should give the new health care law a chance to work and then make changes to it as needed, or a Republican candidate for Congress who says we should repeal the new health care law entirely and then start over?’” 51% of respondents picked the Democrat, 44% picked the Republican. And as The New Republic’s Jonathan Chait notes, “this was in a poll showing a plurality (45-43) preferring a Republican-controlled Congress.”    Chait adds: “One of the political benefits to Democrats of passing the Affordable Care Act  . . . is that it shifted the debate to favorable terrain. Now Democrats are favoring the status quo, and Republicans are trying to pass a radical change.”

Finally, Gallup polling both affirms that the number of Americans who applaud  the ACA has been rising over time, and suggests that opposition is now largely confined to the one group that already has universal coverage– seniors. 

Image001

The Washington Post’s Ezra Klein comments on the divide: “Health-care reform, as you can see in the table, is comfortably popular with every demographic except for seniors. And seniors, of course, aren't opposed to government-run health care. They love their Medicare, and insofar as they have a policy concern here, it's that the Affordable Care Act will interfere with the single-payer system they rely on. The ACA does include some Medicare cuts, and the GOP was extremely effective at messaging on them . . .  But insofar as there's a policy message here, it's comforting for health-care reformers. The Affordable Care Act is popular among the people it will actually affect, and unpopular among the people who are worried it will harm the much-more statist health-care system they depend on.”

In the end, whatever polls you look at—Rasmussen’s, Kaiser’s, Gallup’s–  and however you slice and dice the numbers, one would be hard-pressed to find evidence for Cato’s premise that the “legislation remains deeply unpopular.”  

Four months ago, few Americans knew what was in the 2,500 page bill, or what impact it would have on their lives. Uncertainty fueled anxiety. But with each passing week, the public learns more about health care reform. For instance, this week, the administration announced which preventive services insurers will be required to cover, free of charge. The rules will eliminate co-payments, deductibles and other charges for blood pressure, diabetes and cholesterol tests; many cancer screenings including mammograms for women over 40; routine vaccinations; prenatal care;  and vision and hearing tests for children. The more Americans learn about the details of the legislation, and how reform will help them and their families, the better they will like it. 

Thus Tanner has his work cut out for him if he hopes to persuade voters that the Patient Protection and Accountable Care Act represents “bad medicine.”  In part 2 of this post, I’ll turn to his contention that individual mandates “violate individual liberties” and will “fall far short of the goal” of bringing “young and healthy individuals into the insurance pool.”

20 thoughts on “A Reply to the Cato Institute’s Report on Healthcare Reform – Part 1

  1. The untra right did a good job in trying to destroy this bill. Their argument is that this bill will cost too much money. They don’t mind the government spending on themselves, but not others.

  2. The bottom line to virtually all of your argument(s) are you’re never deft when criticizing the Left.

  3. Maggie:
    Thanks for providing this report, and giving us a chance to critique it.
    On pages 18-19 it states “The new funds would indeed be routed through the Medicare Trust Fund, where government trust fund accounting methodology would count them as extending the trust fund’s solvency. In fact, the funds would be used to purchase special issue Treasury bonds. When the bonds are purchased, the funds used to purchase them become general revenue, and are spent on the government’s annual general operating expenses. What remains behind in the trust fund are the bonds, plus an interest payment attributed to the bonds (also paid in bonds, rather than cash).
    When the bonds become due, the government will have to repay them out of general revenue. In the meantime, however, the government counts on that new general revenue to pay for the cost of the new health legislation. Thus, the government spends the money now, while pretending it is available in the future to pay for future Medicare benefits.”
    In other words, the new funds create an asset for the Trust Fund, and a liability to the Treasury, which nets out to zero.
    The asset is used now for general operating expenses.
    The liability is paid later, years or even decades later, when the trust fund expenses exceed its income.
    A present asset and a much later liability doesn’t compute from a practical accounting standpoint. And, it certainly isn’t fair for the generations that follow when the liabilities must be paid, but the assets were spent years before.
    Don Levit

  4. Don–
    A younger generation pays for its’ parents Medicare.
    That is the way Medicare works.
    Few nations have managed to come up with a pension system that doesn’t work that way.

  5. Don
    I realize that you are very interested in the issue of Medicare funding–you have written about it on HealthBeat in the past.
    But what you are writing about has nothing to do with this post.
    I’d like to see this thread get back on track: Here’s the question at hand: Do Americans support heatlh care reform?
    I have saved your recent long comment and will refer to it when I get to
    the part of the Cato report that addresses Medicare funding..
    For now, I’m hoping that readers will respond to this post.

  6. Hello Maggie,
    Thank you for this post, and I look forward to your future posts and analysis.
    My concern, as has been he case so far, is the rabid Republican right will have the bully pulpit on this issue (and others), and the Dems will mount a feeble “but…but…but”.
    I’m so utterly disgusted with this Administration’s failure to lead in general, and utter failure to champion middle class issues in particular, that I’ve changed my registration back to Independent.

  7. Tom–
    I understand your concerns.
    But on healthcare, I think the adminsitration has done as much as one could hope for. They were working with a largely moderate/conservative Congress and managed to pass a bill that opens the door to real reform.
    In other areas–the wars, Wall Street, jobs– I wish the administration had been more aggressive. But we’ve seen only 1 1/2 years of what they can or will do.
    Fingers crossed that they will begin listening to much, much better advisors in these areas.

  8. Thanks for starting this series. The half-truths (and sometimes outright lies) that I read about health care every day are extremely irritating. When I can, I try to chase down the actual sources to decide for myself if the writer is being honest and whether or not it’s worth my while to read anything else he/she writes. I’m glad that you are presenting us with a more objective and complete analysis of the polling as well as links to the quoted sources. It’s saving me a lot of time. KEEP UP THE GOOD WORK!

  9. Harry C–
    Thank you very much.
    . When I finish this series of posts on “Bad Medicine” the Century Foundation plans to put them together in a single document.
    We hope that when people are tempted to quote the Cato report, they’ll use our document to fact-check.

  10. Maggie, I thought I’d comment over here on your blog to say thank you for all the great information and challenging topics.
    Where do you find the time to do all this research, digest it and then write about it? I don’t think I have that many hours in the day.

  11. well, cato tends to preach to the choir — some other groups on other sides do as well– so we’ll probably see less light and more heat here. that said, it is hard to argue with the assertion that we’re moving to a system with greater government control, whether you want to characterize that as a nanny state or not. given recent environmental and economic challenges, the case for moving in that direction generally seems pretty compelling. and we’re redistributing income from those who have money and good coverage to those who don’t. again, that seems perfectly defensible to me.
    debating poll numbers about whether people like or dislike a system that doesn’t exist yet seems a bit academic to me. its like polling about who’ll win the world series in 2014.

  12. Maggie said, “We hope that when people are tempted to quote the Cato report, they’ll use our document to fact-check.”
    I hate to sound like a nay sayer, Maggie, but my experience of late is people cherry pick the reports they want to believe, the ones that go along with their preconceived notions. It’s a big part of why think tanks like the Cato Institute and the Heritage Foundation are so successful.
    My feeling is those who want to trash reform will cling to reports like this latest from the Cato Institute.
    Reporting like yours makes it easier for me to refute them, as much of the heavy lifting research wise is done for me. That helps me convince the undecided.
    Those who’ve already made up their minds are too reluctant to change them over little things like facts.

  13. Jim–
    Of course people won’t really know how they feel about reform until sometime after 2014.
    But as you know, politicians like to feel that they are in synch with the will of the people–especially in an election year.
    Conservatives are more likely to make the idea of repealing reform–or at least replacing the legislation –a major issue in Congress this fall of polls show a majority favoring reform.
    But if the polls show a trend that continues to move away from the idea of repeal, some Republicans won’t want to be associated with that idea, dividing the Republicans.
    Of course I agree that we need more government intervention whether you call this “creating safety nets” or creating a Nanny state.
    Panacea–
    Yes, I’m writing to help people like you convince the undecided.
    I’m also hoping that other jouranlists and bloggers who are thinking about quoting Cato will use my rebuttal to fact-check or at least provide another point of view that is responding directly to Cato, point by point.

  14. I think the general public has very little knowledge about the ACA besides what they have heard from political pundits. The average person just doesn’t take the time to seek out unbiased information on the internet in order to make up their own mind.

  15. Mark B.-
    You’re right. Most people don’t have the time–or the inclination–to try to read detailed summaries of the legislation.
    Moreover, even if they did, it’s hard to know how it will effect them personallly until it’s implemented and they see what premiums are in their state, and how a million details, small to large, effect their lives.
    For instance, we’re doubling the capacity of community health plans. Most people aren’t aware of this. But in 2014, when there is suddenly a new community health plan in their neighborhood, open after hours, offering excellente primary car, a medical home etc. many will be very pleased.
    In NYC young we have some excellent community health plans and young people–twenty-somethings who have recently graudated from college often find community health plans in neighborhoods where they live. A very conveient place to go if you’re concerned you have strep throat, need contraception, a Pap smear, etc.
    The legislation also requires that private insurers pay primary care docs and nurses at these clinics more than they have in the past.
    This will also relieve over-crowding in ERs–another “good thing” that people won’t see until it actually happens.
    And I’m quite certain that over the next few years, Medicare will begin paying doctors to e-mail, talk to patients on the phone, etc.
    This will be mean significant savings in time and money for patients who don’t have to make an appt. to get a refill, and most doctors will be happy if they are paid for their time.
    Private insures will follow Medicare’s example.

  16. Maggie, The trend of moving away from repeal of this law will stop as we get closer to the November elections and more discussions of this law are brought to the public’s attention. Currently, I believe apathy has reduced the passion of repeal. Out of sight, out of mind.

  17. Bill–
    No one knows what will happen between now and Nov.
    But my guess is that as various elements of reform begin to kick in that people like, support for repeal will weaken.
    What I’m most certain of is that most Americans don’t want Congress to devote more time to debating health care. They want Congress to move on to create jobs and try to do something to improve the economy.
    With unemployment this high, and the economy this weak, that will be the main issue in November. I’m certain of that. History shows that in tough economic times, people vote their pocketbooks. Nothing else matters nearly as much.
    So November won’t be a referendum on health care reform.

  18. Maggie, We cannot afford this ObamaCare bill. It is too expensive and its appointed leader an individual who has exclaimed he likes socialized medicine. And he said it is redistribution of wealth, which is a good thing? It is too expensive, too much bureaucracy, too much government infulence and interference. And, when it is all said and done, there will still be 21 million individuals without medical coverage.

  19. All governments redistribute wealth. The implementation of capitalism with republican elective government is geared toward redistributing wealth upward by making access to gov’t policymakers contingent on the ability to pay for it. Policymakers make policy for those who pay their bills.
    Nations like Canada or the UK have laws that minimize the ability of the wealthy to steer policy decisions in their direction. The US does not.
    The ACA represents a departure from the redistributive norm in this country. The Republican Party has been open about its allegiance to insurance companies in this debate; to financial institutions in the financial reform debate; to the wealthy in the tax cut debate and in the unemployment insurance debate. The core issue for voters is that the Democrats always seem to check their spines at the door when entering the debating hall, as though defending the poor and middle classes were somehow politically unpopular, when in fact, they’re defending the voters who put them in office.
    The Republican Party offers nothing for the mass of voting citizens. But until the other party “grows a pair” and starts acting on its own principles, citizens will continue to distrust both parties equally. It’s absolutely ludicrous that, on any given day, you can see/hear Republicans and their sympathizers openly lying or, as in the present instance, “bending the truth” to achieve a political objective on behalf of the wealthy and/or the corporate; and yet there is no political penalty at the polls for the dishonesty. It is the job of the opposing political party (in this case, the Dems) to inflict that penalty.
    Thanks.
    mp