Arnold Kling  

The Biggest Lie on Health Reform

John Quiggin on Macro... Poster Child for U.S. Health C...

Of the following statements made by President Obama in his speech on health reform last week, which is not true? Answer below the fold.

a) "if you are among the hundreds of millions of Americans who already have health insurance through your job, or Medicare, or Medicaid, or the VA, nothing in this plan will require you or your employer to change the coverage or the doctor you have. "

b) "the reforms I'm proposing would not apply to those who are here illegally. "

c) Now, this is the plan I'm proposing. It's a plan that incorporates ideas from many of the people in this room tonight -- Democrats and Republicans.

d) Reducing the waste and inefficiency in Medicare and Medicaid will pay for most of this plan.

Strictly speaking, I would suggest that none of these statements was true. In addition, the following statements also were misleading:

e) "if you're one of the tens of millions of Americans who don't currently have health insurance, the second part of this plan will finally offer you quality, affordable choices. "

f) "Under this plan, it will be against the law for insurance companies to deny you coverage because of a preexisting condition."

g) "under my plan, individuals will be required to carry basic health insurance"

h) "It [the public option] is only part of my plan"

i) "we've estimated that most of this plan can be paid for by finding savings within the existing health care system"

j) "the plan I'm proposing will cost around $900 billion over 10 years"

k) "The only thing this plan would eliminate is the hundreds of billions of dollars in waste and fraud, as well as unwarranted subsidies in Medicare that go to insurance companies"

What is misleading about statements (a) - (k) is that each of them referred to a plan that, strictly speaking, does not exist. As far as I know, the Obama Administration never submitted a plan to Congress.

One can argue that this is beside the point. He did not need to offer a plan because

i) he is endorsing a bill already in Congress. (but if so, which bill?)

ii) he is speaking in broad outlines, leaving Congress to fill in the details (but if so, how does he know that it is feasible {a} to cut enough spending to pay for the plan without eliminating anything other than waste and abuse and {b} to mandate health insurance without forcing anyone to change what they currently have)?

iii) The conventional wisdom is that Hillary Clinton failed because she presented a plan and it was shot down. So it is really clever to not have a plan, and instead to get behind something that will pass and call it a plan. (Speaking of Hillarycare, its main source of funding was going to be cuts in Medicare and Medicaid reimbursements that everybody knew would never be adopted in practice. Apparently, Baucuscare retains that feature. The NY Times rounds up more commentary on the Baucus plan, which itself is not fully spelled out, although it runs to 225 pages.) If our democracy penalizes those who spell out their plans and rewards those who do not, then that is one more bad mark against our democracy.

If you are going to repeatedly refer to "my plan" or "this plan" or "the plan I'm proposing," then unless you have a plan you are lying. The only question is whether it is a little lie or a big one. Obviously, most people think it is only a small lie, or the President would have been called out on it. However, I think that health care policy is an area where there is too much temptation to promise results that are economically impossible to achieve. In that context, my opinion is that giving a speech in favor of a nonexistent plan is a really big lie.

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COMMENTS (42 to date)
David writes:

From what I can tell, this plan will force me to change my employer-provided insurance because I have a HDHP and HSA through my employer. I could have had a traditional plan, but chose the HDHP+HSA plan, so it was my choice. From what I've heard, it's unlikely that these plans are going to be considered "good enough" under any reform bill.

Steve writes:

I wonder if Republicans would be fighting against this "plan" or if Democrats would be fighting for it if Mitt Romney were president and were trying to enact it.

(k) has been ruled a half-truth, and not just by me. But there is far more to the story. More at the following:

E. Barandiaran writes:

Some weeks ago, Robert Reich complained that critics of Obama's health reform were wrong because Obama had yet to announce his plan. I hope Reich is brave enough to dennounce Obama´s lies and failure to announce a plan.
Reading CBO preliminary appraisal of Baucus plan, I got the feeling that the pressure on CBO to be at least non-negative is increasing.
As you say, Obama´s strategy is now reduced to my plan is whatever it´s approved by Congress.

SheetWise writes:

I would like to see more discussion of why we are talking about health reform. What's the crisis?

As far as I can tell -- for both those who are insured and uninsured -- health care has already been socialized by administrative law.

It has been further socialized (by that I mean costs have been strategically shifted) between those insured privately and those insured by the government. This is the source of escalating premiums for insurance -- cost shifting.

What's the crisis?

Baby Boomers are aging. The government understands that it cannot possibly keep the promises it has made.

The government fears defaulting on it's promises while, at the same time, leaving a private system in place that will stand as a stark example of how much they've fu*ked things up.

I concur with Kling that it is very tricksy that Obama should continue to invoke "his" plan where none exists. But I wouldn't go so far as to say that it is "lying". (An aside: if Kling were a member of Congress he wouldn't be allowed to disseminate such utterances, reference). I would rather characterize it as quite deliberate politicking that he should allow the members of Congress to write, debate, revise, and pass a healthcare bill with only the most broad and general outlines of a plan that he could call his own (only bullet points really). While the media lambasts "Baucuscare", Obama will be left in the clear to mull with his mediocre approval ratings.

While I strongly believe that this approach is very smart and calculated, I don't think that this "hands-off" approach to governance is wise in the long-run. In the short term: it is unlikely that with a Democratic majority in Congress they will pass a plan that he radically disagrees with, but he is gambling with not having a big enough impact on an issue that obviously means a great deal to him. For instance, the public option is the point that most leftists want to see, and by-and-large seems to be fading in importance in all of the bills under consideration (to garner moderate support). In the long run, the risk Obama is playing with is not creating enough of a legislative imprint to be of any historical interest save for his election in the first place.


SheetWIse writes:

Thinking about governance -- I hate this sentence

"The government understands that it cannot possibly keep the promises it has made."

It should read -- "The governors understand that they cannot possibly keep the promises that they made."

muirgeo writes:

"What is misleading about statements (a) - (k) is that each of them referred to a plan that, strictly speaking, does not exist. As far as I know, the Obama Administration never submitted a plan to Congress."

Arnold Kling

From the Presidents Speech

"The plan I'm announcing tonight would meet three basic goals:..."

The speech IS the plan.... I'm pretty sure what he said I on record at this point. So if that's his plan it's pretty hard to be lying about it isn't it.

Also there is this;

Dan Weber writes:
I would like to see more discussion of why we are talking about health reform. What's the crisis?

16% of GDP goes towards health care. And increasing.

Unfortunately, it doesn't seem like Congress is going to pass anything that bends that curve.

Now, maybe 16% is what we want to allocate to health care, but since there is no feedback in our system for efficiently-driven medicine, I think it's much more likely we ended up here by accident, unable to tell good medicine from bad.

John writes:

"The speech IS the plan.... I'm pretty sure what he said I on record at this point"

Something that few folks bring up about the debate is that if the President (& Pelosi) had his way, the debate would be over and something would have passed. Isn't it rather late to be announcing his plan...

I don't agree that Obama's speech is his plan. While a speech does provide the broad outline of what Obama wants, it lacks any of the intricate details that have to be elaborated on in a bill in order for a law to actually work. For me, Obama right now is like an ideological teen, with a vague idea of what he wants to do and no conceptualization of how to get there.

Thomas A. Coss writes:

Here is where medicine is at a profound disadvantage in comparison to politics, we can not be sloppy with our language. If a physician tells their patient that as far as he or she knows the patients' cancer is cured; the patient wants to know that the physician is being truthful and honest.

Would Obama apply his threshold of honesty and candor to his or his families physician in regard to a diagnosis? Would Obama sleep just fine if his physician, similarly inclined as he, said "everything's fine"?

T. A. Coss, RN

Daniel Kuehn writes:

J Daniel Wright -
RE: "While a speech does provide the broad outline of what Obama wants, it lacks any of the intricate details that have to be elaborated on in a bill in order for a law to actually work."

It's not his JOB to have intricate details. That's Congress's job. I don't know why the interpretation of "plan" is so legislation-centric.

September 17th is Constitution Day. Let's use this one as an opportunity to calm down and keep in mind the separation of powers.

"Daniel Kuehn writes:
It's not his JOB to have intricate details. That's Congress's job. I don't know why the interpretation of "plan" is so legislation-centric."

Semantically, you are right. However, Obama earned his stripes coming up through the legislature so he knows how to craft legislation. You are right he can't introduce a bill himself or that writing bills isn't in his job description. Rather, he would have to pawn an already-written bill off on someone in his own party (who would probably gladly put it to committee with strong presidential support behind him). That wouldn't be without precedent either (e.g. Bush proposed the No Child Left Behind Act and it was spearheaded in the Senate by Ted Kennedy). It is the reluctance of President Obama to do this that is the surprise.

SheetWise writes:

"It's not his JOB to have intricate details. That's Congress's job. I don't know why the interpretation of 'plan' is so legislation-centric."

Because there was a plan in Congress -- several plans -- and none of those plans agree with what he is now saying is his plan. Yet, he was campaigning to have any combination of those bills signed -- as quickly as possible -- to end the "crisis". It certainly appears that he'll sign anything Congress sends him -- not that he has a plan.

On a slightly different issue but still on healthcare.

It is really a mystery for me why the Republicans are not attacking the individual mandate as much as the public option.

The individual mandate is the real Trojan Horse for single payer, and the greatest assault on freedom in the "reform".

Moreover, many leftists (e.g. Krugman) shamelessly justify the public option exactly for the reason that it will be required for offsetting the increase in market power of the private insurers as a result of the mandate.

Arnold Kling is exactly right. Where is the plan that Obama supports, in writing so that it may be analyzed and criticized in a reasonable manner? Hiding the details as a political tactic is fraud on the public.

Further, people are writing bills, in detail. Where is/are the research papers that support the writing of the bills? The bills are detail. What research underlies those details? This research has to be there. Right? We need to see it.

The Congress and Obama should proudly present their careful research that supports their proposed rearrangement of healthcare. Obama is a Harvard trained law professor. He should be up to it.

Where is the policy paper, Obama's/Congress's research on healthcare reform?

The push for healthcare reform is motivated by a financial disaster. Congress has promised Medicare, Medicaid, Prescription Drug, and Social Security services over the next 75 years that are $88,000 billion unfunded.

The public discussion is about the burden of $1 trillion ($1,000 billion) in extra taxes over 10 years. The true shortfall is 12 times as much, more than $1 trillion per year.

The Democratic "solution" to this political and economic problem is to put everyone into one medical care pot. We then all get equal amounts of services at whatever high tax rate the government can levy. The young must be coerced into this system, to extract as much money as possible to serve the old.

Obamacare Bails Out Medicare

Methinks writes:

16% of GDP goes towards health care. And increasing.

So what? What makes you think that Singapore's 4% is more correct than France's 11% and why is 16% the "wrong" number? If 16% is the wrong number, then what is the "right" number and why is it you (or congress) who gets to choose it for me?

We spend a higher percentage than that on shelter. Is that also wrong? We spend vast amounts of money on unnecessary crap just for the pleasure of it. Is that a crisis?

I wouldn't be so quick to fall into the trap of panicking over the percentage of GDP we spend on something as vital as our health - without which shelter and novelty stuff is pretty worthless.

Andrea writes:

[Comment removed pending confirmation of email address. Email the to request restoring this comment. A valid email address is required to post comments on EconLog.--Econlib Ed.]

Adam writes:

Thanks Arnold.

vic writes:

Daniel Wright writes:

However, Obama earned his stripes coming up through the legislature so he knows how to craft legislation.

The problem is that
1. Obama did not earn his stripes
He was a piiddly state senator who won by default because the chicago tribune ( ? acting on his behest - who knows? chicago is a murky place) got a judge to unseal salacious material from Jack Ryans divorce proceedings.
2. Most times in the Illinois senate and in the Us senate he voted "present". there are no major obama thumprints on any significant legislation.

3.It is becoming increasingly clear, that while an excellent motivational speaker with a rhetorical style reminiscent of black preachers, he is somewhat of an empty suit.
He seems to think that ideology trumps all else.
each and everyone of his major initiatives are falling flat
the latest faux paux being BMD and poland/ czech rep

bottom line we collectively have been duped by our emotional need to pay penance for the sins of our forefathers, and we have elected a somewhat likeable, clean cut looking, articulate african american who is either a con man or a bumbling fool or both.

Michael Smith writes:

Methinks has an excellent point.

The notion that there is some magically correct amount of GDP that should be devoted to healthcare is preposterous -- and the notion that government should put a gun to our heads to force compliance with some arbitrarily selected percentage is nothing less than the naked advocacy of enslavement under totalitarian government control.

To paraphrase from our founding document:

But when a long train of abuses and usurpations, pursuing invariably the same object evinces a design to reduce them under absolute despotism, it is their right, it is their duty, to throw off such government, and to provide new guards for their future security....... A prince, whose character is thus marked by every act which may define a tyrant, is unfit to be the ruler of a free people.

And you, Prince Obama, are unfit to be the President of a free America.

Bill Peschel writes:

Obama's promotion of a plan that is not even finished is one of his greatest mistakes.

It's one thing to say that you're proposing this and admitting that Congress might not put in all the details. That's being honest about what you want, and honest about the process.

But when you're telling people that "the debate is over" (when they're debating the details in Congress) and that "under my plan this will happen" (when the plan hasn't been settled) and that "under this plan illegal aliens won't get medical care" (when it's obvious that is a semantical side-step and not the truth), you've lost the trust of the people who put you into office.

Obama has been acting like a snake-oil salesman, promising something he can't deliver. He comes off as incapable of treating the voters as if they can read the news and understand the truth of the matter.

OK, I understand the position of people like Michael Smith, and those who hold his beliefs will not like Obama anyway. Those people will never support him. But Obama's also losing those voters who expect the president to, well, act presidential. To deal fairly with those who have honest questions about what we're getting (because this bill affects everyone the way the Vietnam War draft affect all males between 18-24; that's why we're seeing similarly emotional protests) and getting in return abuse and hostility.

Steve W from Ford writes:

Methinks is exactly right. What gives Obama or anyone for that matter, the right to decide how much I want to spend on my health care?
I know what gives the government the desire and that is the fact that they have already taken over responsibility for 40 to 50% of the health care spending in this country and they do not like the size of the bill and the rate at which it is growing.
This dynamic will not get any better if government takes over the remaining portion of the system, it will get worse and that can only mean rationing on the basis of what the bureaucrats and politicians and Krugman's of the world think is the right percentage of my income I should spend on everybody's health care.
Any health care bill that comes out of this congress and is signed by this president is guaranteed to make each of us less free to make our own decisions in the name of a mythical equality.
The biggest lie in Mr Obama's speech was "my plan will not add one DIME to our deficits"
We all, unfortunately, now expect some presidents to lie to us blatantly. What makes it worse is that it is able to be done in such a transparent manner while the "watchdogs" (read lapdogs) of the media sit and wag their tales and never mention a word.

Paul A'Barge writes: are lying

You said it. Not Joe Wilson.

Peg C. writes:

Note to Steve: Plenty of us "Republicans" (and especially us conservatives) would be fighting RomneyCare tooth and nail. It is a miserable failure in MA. But a lot of us don't want to vote for Romney in any case, should he run. Don't assume we are against this just because of Obama. This is not his bill; it is Pelosi's, Reid's, and various other corrupt and lying Democrat Congresscritters' bill(s). And it reeks any way you look at it. It's just that Obama is lying constantly in our faces on a daily basis. The Liar-in-Chief.

Arnold Kling writes:

I personally did not support Romney's plan in Massachusetts. See the op-ed I published the day it passed. Romney was not happy with my op-ed. He wrote his own op-ed the next day.

Ben writes:

You guys don't understand. They say "the US spends 16% of our GDP on health care and it's too much". What they really mean is:

"The US spends 16% of our GDP on health care and it's too much. If we shrink that to 14% or 12%, then we in the ruling class could take the savings and spend it on other things. We have schemes. We need new money to payoff the people who voted for us. And we want (we deserve) to keep some of that money for ourselves."

Sixteen percent is too much because they covet that money. And if they can just eliminate a few (people with) health expenses, it'll be like they won the lottery -- wealth and power forever.

Peg C. writes:

Ben, I agree, but why does no one challenge their complaint that 16% of GDP is too much to spend on health care while they simultaneously shriek that 46 million Americans are uncovered and must be? Nevermind the falsehoods in the 46 million number (or whatever they say today); they have to be challenged on the inherent inconsistency and impossibility of those 2 assertions both being true.

Every single Dem or lefty who makes either or both of the above claims MUST be challenged by all of us on those claims. And how much health care must be denied to the elderly to cover 46 million more people without adding to the GDP burden? Just talk dollars and cents and facts to these people and they go insane when confronted with economics and logic.

Lastly, where are the doctors who will service 46 million more people, when 45% of doctors are seriously contemplating leaving the profession if ObamaCare passes? Are Democrats contemplating importing low-scoring 3rd world doctors into the U.S. at slave wages? Makes you wonder. Democrats truly do want to kill us off.

Fen writes:

Plan sham. Just talking about ObamaCare has already reduced the number of uninsured from 48 million to 30 million.

Besides, who needs a Bill? Its not like Congress is going to read it before voting on it.

Also, I saved 10,000 jobs today. Yay me!

IOpian writes:

I agree with SheetWise @ 10:48am.

It was mortgage lending that broke the system. Why the urgency with health care?

My take is that this is a ruse. Like the illusionist trick of getting the audience to watch the more active hand while the other picks your pocket.

If Medicare is broken then fix it. That would make a great 'trigger'. If government can fix this then let's revisit the possibility of expanding it. If the problem is coverage then wouldn't a mandate alone fix that? It will be a burden to marginal income earners either way.

Why is building this convoluted system necessary to do these other things that could be done in separate and more specific legislation?

It is obvious that this opportunity of undivided government is fleeting and if these long-term goals are to be achieved then it needs to happen
in this narrow window of two guaranteed years. Thus the rush. Salesmen are salesmen and press us so they can close the deal.

My view is that this is about expanding federal control over every aspect of national life. While we debate the public option, medicare, 'the plan' we are not watching the hidden hand I -
this 'one stop shopping' Health Insurance Exchange.

After this exchange is established the concept of a private plan not be the same as it is now. There will only be 'government approved' private plans. A government agency will become the 'shadow board' of these companies. The insurance companies will then be government controlled entities. In a sense fascism lite.

Once control is established then the existence a public option will not require your input.

The government will have access to your bank account, your medical records or if you're a small business owner then your bank account information may be shared within the structure which includes the IRS who will provide small-business owners the convienience service of automatically withdrawing your quarterly estimated taxes from your account.

At that point the government will have, by means of statutory law, nullified your fourth amendment rights to be secure in your persons, houses, papers, and effects.

ken in sc writes:

I understand that Americans spend more on pet food that anyone else. Does this mean that we have a pet food crisis?

dan writes:

[comment deleted for offensive tone]

moosecat writes:

don't forget the lie about the man who died after losing his insurance:

Celebrim writes:

"It's not his JOB to have intricate details. That's Congress's job."

Maybe I'm just old fashioned, but up until now, a President, if they wanted to get a certain legislation passed crafted it in the White House and submitted it to Congress by having sympathetic members sponcer the bill.

That's called 'providing leadership'.

I cannot before recall a President with an agenda who did not submit legislation to Congress. The final bill might be changed from what he submitted, but they got the ball rolling. This President doesn't do that. It's not a welcome change.

Carolus writes:

The problem with Obamacare can be summed as follows: The answer is government control over health insurance, which requires rationing of care. Now, what's the question?

It's all bass ackwards, driven by base ideology.

Methinks writes:

Why the urgency with health care?

The 2010 election.

Dezakin writes:

Welcome to ideology over arguments at econlog.

We ration care already on price, and it is often enough a market failure given all the existing perverse incentives.

Don Meaker writes:

In addition to saving money by kiling granny instead of treating illness, the Government can save money by killing grandma to cut social security payouts. This frees up more money for more Chicagoesque voter fraud.

See, it is a bug, not a feature. If you can abort them before they are born, you can abort them after they retire!

Jim Bradley writes:

Dear Prof. Kling,

Thanks for this post. We frequently hear of the lower costs per person or lower % of GDP for health care delivery of other countries. It seems to me that there is free riding in these other countries - in that Americans bear the additional and up front costs of innovation while the others pick up the benefits of established drugs or other technologies via their monopsony drug purchasing programs or licensing restrictions or second mover (lower) pricing. Is there any analysis of this issue out there? Is it inconsequential? This is a bit stale, but many thanks for your thoughts.

Best regards,


Joel writes:

I can't believe some of the tone deafness I'm reading. Where is the crisis? Obviously these people have never had to declare bankruptcy because of mounting health care bills. I've heard in 5 to 6 years, if left unchecked, the average family of 4 will be spending around $50k on health care per year. You tell me how many average American families can afford that? What really irritates me is it seems our politicians are defending a system that takes 30cents out of every dollar for our health care industry and they don't seem to be satisfied with that. We need to turn over health care back to health care professionals and not profit driven insurance companies.

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