Hurray for Telling the Truth About Health Reform

by Pejman Yousefzadeh on March 20, 2012

Which Paul Krugman very plainly does not do:

. . . How would ObamaRomneycare change American health care?

For most people the answer is, not at all. In particular, those receiving good health benefits from employers would keep them. The act is aimed, instead, at Americans who fall through the cracks, either going without coverage or relying on the miserably malfunctioning individual, “non-group” insurance market.

(Emphasis mine.) Of course, employers are already dropping health care coverage thanks to rising insurance premiums. And the Obama administration’s health care reform bill is prompting more employers to think about dropping coverage:

Employer-sponsored health insurance is a long-standing pillar of the U.S. health system, but its role appears likely to evolve soon. A new survey by Towers Watson, a consulting firm, finds that many mid-sized and large companies plan to stop offering coverage once federal insurance exchanges, a central element in President Obama’s health care reform law, open in 2014. The exchanges are designed to provide a marketplace where people will be able to buy government-subsidized insurance. Here’s what you need to know:

How many companies plan to stop offering health benefits?
Nearly 1 in 10 plan to drop coverage once their employees have the insurance exchange option, according to the July survey. And that number could rise, as another 20 percent say they still aren’t sure what they’ll do. Another big benefits consultant, Mercer, got similar feedback in June, when 8 percent of the employers it asked said they were either “likely” or “very likely” to end health benefits once the exchanges are up and running. Together, the surveys covered more than 1,200 companies.

The Towers Watson survey only served to reinforce the finding of the McKinsey survey from last year:

At least 30 percent of employers are likely to stop offering health insurance once provisions of the U.S. health care reform law kick in in 2014, according to a study by consultant McKinsey.

McKinsey, which based its projection on a survey of more than 1,300 employers of various sizes and industries and other proprietary research, found that 30 percent of employers will “definitely” or “probably” stop offering coverage in the years after 2014, when new medical insurance exchanges are supposed to be up and running.

“The shift away from employer-provided health insurance will be vastly greater than expected and will make sense for many companies and lower-income workers alike,” according to the study, published in McKinsey Quarterly.

“While the pace and timing are difficult to predict, McKinsey research points to a radical restructuring of employer-sponsored health benefits.”

Among employers with a high awareness of the health reform law, the number likely to drop health coverage for workers rises to more than 50 percent, the report predicted.

To pretend that these considerations don’t exist is utterly dishonest. To dismiss them out of hand without seriously addressing the argument that employers are being given every incentive to drop health care coverage is completely lacking in credibility. I propose that similar lie-tellers on issues of public policy be described as “Krugmanesque.” The epithet would be fitting.

After all, one need only remember what Daniel Okrent, the onetime New York Times ombudsman, wrote about Krugman: “Op-Ed columnist Paul Krugman has the disturbing habit of shaping, slicing and selectively citing numbers in a fashion that pleases his acolytes but leaves him open to substantive assaults.”

And not just numbers.

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