Protect the bill
January 31, 2014, 4:21 pm
Filed under: Uncategorized

This piece from Kevin Drum is a good example of protect-the-bill analysis:

“Their premiums are going up as much as 25%….Anthem Blue Cross said its plan to raise rates reflects that escalating healthcare costs are an economic reality industrywide.”

Roger that. Premiums are skyrocketing for policies that have nothing to do with Obamacare.

Anthem didn’t raise premiums ‘because of Obamacare’, you see. They just raised premiums 25% because of skyrocketing healthcare costs, which are an exogenous ‘economic reality’ having nothing whatsoever to do with Obamacare. Drum (for the purpose of this particular post) accepts this explanation and puts it forth as disproof that this is an Obamacare horror story. And that’s a blog post. Good blog post. Go home early Kevin Drum, good job today, you’ve earned it.

Because, you see, skyrocketing healthcare costs can’t possibly have anything to do with Obamacare. These things (Obamacare and healthcare costs) are siloed off and firewalled from each other. Except if/when healthcare costs are slowing or going down, in which case that’s because of Obamacare. Everyone knows that.

Likewise, one interesting implication of this ‘analysis’ is that money is not fungible. For example, insurance companies do not co-mingle dollars internally. Hence they can’t possibly be passing on increasing costs from thing #1 to customers in set #2.

People who thought (erroneously) that money is fungible might think that none of these factors can be so cleanly separated, and so that when a giant healthcare bill is passed that has a large effect on health insurance and the health compensation market, then later when healthcare costs and/or premiums skyrocket, the bill is likely to be there in the mix as one of the causes. At the very least, you’d consider it a possibility requiring serious analysis, not something you could just blithely wave away.

But I guess money is not fungible, so you can just separate out these issues. Obamacare’s not to blame. The corporation said so! Corporations don’t lie.

This all got me thinking though. Wasn’t the mere existence of Obamacare supposed to magically slow down healthcare costs? Why does Drum so blithely accept Anthem’s ‘skyrocketing healthcare costs’ explanation for why they are raising premiums on this group? And if he does, shouldn’t he consider that a failure of Obamacare?

For this we really have to first sort out & figure out what Drum’s priors are here though. Does he agree with & accept the idea that healthcare costs are ‘skyrocketing’? Turning to Google, we find that it really depends on the date:

5/27/10: Healthcare Costs Going Up, Up, Up. Pretty self-explanatory. Obamacare, of course, while not enough, was a step in the right direction, said he.

4/28/11: Our Ballooning Healthcare Costs. Clearly, he thought healthcare costs were growing too fast at this point, and had been for some time.

8/10/12: Healthcare Costs are Slowing Down. “…and they’ve been slowing down since well before the current economic downturn.” Before 2008-09 or so? Wow! What am amazing turnaround! It even went back in time!

5/14/13: Our Amazing Slowdown in Healthcare Spending Growth: “Bottom line: I think the moderation of healthcare spending growth has been going on for quite a while. And while Obamacare may very well accelerate this trend, it’s too early to say it’s had any effect yet.” And he has some choice words for anyone who thinks Obamacare might lead to a massive increase in healthcare inflation – those people “just don’t get” it.

5/24/13: Obamacare Gets Some Good News From California. “…Obamacare’s structure seems to be doing a pretty good job at its core mission of controlling prices.” So 10 days earlier it was too soon to tell, but yup, now, he’s ready to say it’s the ‘structure’ of Obamacare that is ‘doing a pretty good job’ of ‘controlling prices’.

7/15/13: Healthcare Watch: Cost Growth Is Decreasing, But Employment Growth Remains Steady. “…the growth of healthcare costs is indeed slowing down”

Okay, so there we have it. Reminder here, what I am trying to do is to figure out what Kevin Drum thinks. Now granted, some of the above is muddled by switching between growth and growth-rates. There’s also the fact that as a wonk-pundit Drum has to constantly be linking to/discussing the latest chart going around. But despite those complications, it does seem pretty clear that, as recently as July (6 months ago), Kevin Drum thought that while healthcare costs had been skyrocketing, sometime between 2008 and 2011 (it’s fuzzy) they started slowing down, possibly due to Obamacare, to the point where in a few years they’d stop growing faster than inflation. Got that?

So then howcome when an insurer raises their premiums by 25% and says it’s ‘because of skyrocketing healthcare costs’ Kevin Drum doesn’t call foul? He should either (a) argue, and point to all these charts he had been wonkishly paying attention to & blogging about showing a slowing-down, or (b) display surprise at the news that healthcare costs are suddenly ‘skyrocketing’ given that as recently as six months ago he not only didn’t think they were but was practically ready to partially credit Obamacare for the slowdown.

But of course, (a) would prevent him from ruling out Obamacare as a contributing factor of this premium hike, while (b) would require him to acknowledge that Obamacare hasn’t had a cost-reducing effect, and to try to explain why costs are still skyrocketing, and that could lead back to people blaming Obamacare, so. Can’t have that. Either one.

The lessons we learn from all this:

1. Whether healthcare costs are going up too fast or under control depends on which one you need them to be doing for your argument at the moment. If you need to construct an argument for getting a giant interventionist healthcare bill passed, you need costs to be going up, up, up. If the bill has gotten passed and you need to argue that it’s ‘doing a pretty good job’ you need costs to be slowing down. But if insurers are raising rates, you need costs to be going up, up, up so people blame the generic ‘skyrocketing costs’ rather than the bill. Go forth, Journalist, and protect the bill at all costs.

2. Cause-effect relationships only work one way – in favor of Obamacare. If costs go down, that’s probably because of Obamacare (you can say stuff like ‘probably’ or ‘too soon to tell but looking good’). But if costs go up, that can’t possibly be because of Obamacare, because suddenly ‘costs’ are an exogenous thing totally unaffected by Obamacare. ‘Costs go up’ and ‘Obamacare has an effect on costs’ are mutually exclusive – disallowed by the laws of physics, or something. Protect the bill.

3. Obamacare is inherently likely to reduce healthcare costs, and that’s a big reason why you all should support it. It will ‘bend the cost curve’™! Except that if/when it doesn’t, in which case that wasn’t even its main goal and silly it could never be expected to counteract general market forces like exogenously ‘skyrocketing costs’, and so when costs go up that’s not a failure of Obamacare worth mentioning at all. (Protect!)

4. Kevin Drum is a hack. Okay, in fairness, I guess we didn’t really just learn this.


6 Comments so far
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I looked at all those posts. The first is about health insurance, the second about healthcare “spending”, third about both (I think), fourth I have no idea, fifth is insurance again, and sixth seems to be about spending again. I bring this up because we have two things here, one is the actual costs of “healthcare” goods and services, and the other is the cost of the insurance that most people use to pay for these things. Because they go through a middleman, most people don’t actually care about the cost of healthcare goods, except insofar as they affect the price they pay for insurance, which they do care about. But the price of insurance can also go up without a corresponding increase in healthcare prices. Like, say, if there were some welfare hidden in there somewhere.

In other words, Obamacare has to make health insurance costs go up. That’s pretty much the only way the welfare portion will work. People now get their pre-existing conditions “insured”, bam–others pay for it. People now get insurance at a price they can afford, bam–others pay for it. How on God’s green earth were rates ever going to go down? Even with the best reform measures possible it wasn’t going to be enough to offset this kind of thing.

That said, maybe healthcare costs themselves haven’t actually gone up, or gone up more slowly. But our punditocracy doesn’t even seem to know what they’re really discussing, because an increase in spending doesn’t necessarily signal an increase in costs. We might just be buying more. Most likely it’s a combo of factors, but you’d think that would be a question these healthcare experts would concern themselves with.

So TLDR, the hackery seems to go further than you imply.

Comment by Matt

I just want to know why we had to upend things so a few people could have their egos massaged about their need for charity being disguised as ‘paying for insurance like a normal, not-incredibly-sickly person’.

Comment by The Unreal Woman

There’s two sets of egos being massaged, one being the people you mention, the other being self styled ‘progressives’ who want to think of themselves as charitable…add ’em together and it was a big enough constituency apparently.

Comment by Crimsonic

Well, we’ll see about that one, since Obamacare has to date increased the number of people without insurance, including among the very sickly!

Comment by The Unreal Woman

That evidently hasn’t prevented group #2 from thinking how charitable they’re being by Protecting The Bill. But yeah, we’ll see…

Comment by Crimsonic

I try to be a good man, but I’ve just never been able to make myself read Smart commentators like Drum. The true explanation to your question was obvious a decade ago.

But as always, I thank you, Sonic-Charmer-or-whoever-you-are, for reading these people so that I do not have to!

Comment by SkepticalCynical

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