Last week, I wrote about a Families USA report that invented a version of Mitt Romneys health-reform plan, and then attacked that invented version with a flawed and partisan analysis originating from the work of Obama adviser Jonathan Gruber. Today, another pro-Obamacare outfit, the Commonwealth Fund, released a similar report, inventing yet another version of Romneys plan, also relying selectively on Grubers models. "This report," write the Commonwealth authors, "makes a set of assumptions [about Romneys plan] to assess their potential effects." Thats an understatement.
(DISCLOSURE: I am an outside adviser to the Romney campaign on health care issues. The opinions contained herein are mine alone, and do not necessarily correspond to those of the campaign.)
Why the Families USA report was fatally flawed: a review
First, lets review the numerous problems with the report put out by Families USA, an activist group dedicated to supporting the Affordable Care Act. The most important is that, while Mitt Romney has expressed his desire to equalize the tax treatment of employer-sponsored and individually-purchased health insurance, he hasnt specified how to do so. There are a number of options, options that have a wide range of implications for coverage and cost.
If, under a Romney administration, Congress passed a law with a universal tax credit for health insurance—akin to the John McCain proposal in 2008, or the Patients Choice Act proposed by Sens. Tom Coburn (R., Okla.) and Richard Burr (R., N.C.) and Reps. Paul Ryan (R., Wisc.) and Devin Nunes (R., Calif.)—we would have, for the first time in America, universal coverage.
On the other hand, a standard-deduction approach like the one proposed by George W. Bush in 2007, would expand coverage modestly, by about 11 million, but would require no new federal spending, and would in fact reduce the deficit substantially.
A third possibility would be to combine the two approaches, applying a standard deduction to taxpayers and a universal credit to Americans without tax liabilities, achieving universal coverage.
Romney has recently floated the idea of an individual-deduction cap, the savings from which could easily fund a universal health insurance tax-credit system, depending on how the cap was structured.
These are big differences. A rigorous study from liberal organizations would look at these three possibilities and evaluate them side-by-side. Instead, Families USA decided only to examine the Bush 2007 model, because it only expands coverage modestly, allowing for unflattering comparisons to Obamacare on that sole statistic of coverage expansion.
There were other egregious flaws with the Families USA study. It didnt account for the impact of Obamacares $2 trillion of Medicare cuts and tax hikes; it didnt disclose whether or not Obamacare would increase underlying health premiums relative to Romneys plan; and it implausibly claimed that expanding tax subsidies, under its fictional Romney plan, would somehow reduce coverage, something that contradicted non-partisan analyses of the Bush 2007 proposal.
Commonwealth study once again fails to disclose Obamacares higher premiums
At least Families USA modeled a health plan that somewhat resembles a major Republican proposal. The Commonwealth Fund invented something that no leading Republican has ever proposed: simply expanding the unlimited employer-sponsored insurance deduction to everyone. "This analysis assumes that Romney…make premiums for self-purchased health insurance deductible from taxable income on an above-the-line basis—that is, a deduction available to all."
While there are certain appealing elements to such an approach, its fiscal cost would likely be prohibitive, and it would do nothing to address the fact that unlimited tax deductions for health insurance contribute significantly to rising premiums. And Romney has explicitly stated that his goal is to lower tax rates by limiting, rather than expanding, such tax deductions. Romney has never supported anything resembling what Commonwealth proposes.
Most importantly, the Romney approach would have the effect of reducing premiums, whereas Obamacare increases them. Rising premiums is the principal cause of the uninsured problem in America. Notably, just as with the Families USA report, the Commonwealth authors dont disclose a comparison between Romneys plan and Obamacare on this crucial metric.
Commonwealth makes ideological claims about Medicaid block grants
Arguably worse than Commonwealths made-up tax-reform plan is its assumptions about Romneys proposal for Medicaid reform. Its here that the Commonwealth study exposes itself as an ideological, rather than an objective, analysis.
As I discussed on Monday, the whole point about block-granting Medicaid is that by getting the federal government out of the business of micromanaging state expenditures, states will be able to reduce wasteful spending and direct more money toward paying physicians and providing actual health care to those who need it. I made the analogy between giving Jack $100 to buy food however he wanted to, and giving Jill $100 to buy food, but only at Zagat-rated sushi restaurants in New York City. We could give Jack $90, but hell still be able to buy way more food than Jill with her $100 sushi plate.
The Commonwealth study, on the other hand, assumes that block grants will result in zero efficiencies. Given that efficiency is the whole point of block grants, and that efficiency has been achieved in numerous other areas where block grants have been tried—most famously in the 1996 welfare reform law—Commonwealth had an obligation to explain why they assume no efficiencies in this particular case. They didnt even address the question.
Instead, they simply assumed that: (1) reductions in the growth of Medicaid spending would in their entirety be achieved by reducing payments to doctors (50%) and cutting eligibility to the program (50%); (2) states would reduce their own Medicaid spending by a significant amount (something Romney would have no influence upon); (3) states would reduce eligibility for children and non-elderly adults, but not the elderly and the disabled.
Indeed, its Obamacare, by driving states to expand their Medicaid programs under the current, unreformed system, that will most likely lead to even deeper cuts in provider reimbursements.
Basic factual errors regarding Romneys Medicare plan
Perhaps the most striking note of partisan bias in the Commonwealth study is its description of the Romney plan for Medicare reform, something that has been described in detail in public. "Beneficiaries would likely face higher out-of-pocket spending," the Commonwealth authors declare, "if the level of premium support failed to keep pace with growth in health care costs." This is absolutely untrue: Romneys Medicare plan was explicitly designed so that premium support would keep pace with cost growth. This is not a matter of debate or analysis: but purely a matter of fact.
As with the Families USA study, the Commonwealth authors echo fact-free Democratic talking points claiming that Obamacares $716 billion in Medicare cuts actually result in "new Medicare benefits." I take apart this claim in more detail in yesterdays blog post. The ratio of Obamacares Medicare cuts to "new benefits" is 15 to 1. And those cuts do, indeed, cut benefits, particularly for the Medicare Advantage population.
Most importantly, the study doesnt factor in the impact that these cuts will have upon access that seniors have to health care, cuts that will cause hospitals to close, and doctors to stop seeing Medicare patients.
The goal of health reform should be to lower the cost of insurance
The bottom line is that health insurance keeps getting more expensive every year. Unwise and counterproductive government policy is the reason why. Instead of attempting to unwind the system of subsidies and mandates that drives up the cost of insurance, Obamacare makes them worse. According to Jonathan Grubers own work—work which was not discussed in either the Commonwealth or Families USA studies—Obamacare will increase premiums by 19 to 30 percent in the non-group market.
The Romney plan, by contrast, aims to reduce the cost of insurance by ending the unlimited employer tax exclusion, and using the savings and resultant premium reductions to expand coverage.
President Obama promised over and over again, four years ago, that he would "lower your premiums by $2,500 per family per year." Instead, premiums have gone up by a comparable amount since Obamacare was passed, with further increases on the way. This is not a solution to the health care problems facing America. It is an exacerbation of them.
Original Source: http://www.forbes.com/sites/aroy/2012/10/02/commonwealth-fund-makes-up-its-own-romney-health-plan-then-attacks-it-because-its-not-liberal-enough/