Consumer Power Report #246

Published November 8, 2010

What an election season it was. I’m hesitant to exaggerate things–I’m of the opinion that, as smart analyst Patrick Ruffini has noted, this election was less about a tidal wave of something new than it was about returning the country to its natural center-right political state. The fact that it took 60+ seats to do that is an indication of how far the United States has shifted in recent years as voters on the right side of the aisle stayed home. Now we have an opportunity to see if the new leadership on Capitol Hill, and the new influx of conservative/libertarian members of the Senate, have learned their lessons.

For the actual election results, I was fascinated to see how significant the health care issue was at the ballot box, as Grace-Marie Turner notes. Even in a period when many expected economic issues to be at the forefront–and of course this is an economic issue, not merely a domestic policy one–it seems clear from the exit poll data that negative reactions to President Barack Obama’s health care law drove disgust among political independents to a greater degree than any legislative issue. As Democratic pollster Pat Caddell noted in reaction to Obama’s press conference, this is clearly borne out by the numbers–numbers the White House still seems unwilling to acknowledge:

[Obama] doesn’t get it, and the exit polls show it, and the results do. This was not just the economy, as important as it was, was not the decisive factor this election; health care was. … Among Democrats who favored repeal, 36 percent voted for Republican[s]. Among independents who favored repeal, 86 to 9 voted Republican. You could see Democrats going down who voted for health care bill being wiped out. … Look, in my lifetime, this is the first time my party will have less than 200 seats in the House. Health care is a major thing … health care killed them, and they don’t understand, the American people found this a crime against democracy. They want it repealed, and this issue is gonna go on and on, and [Obama] seems absolutely tone-deaf.

I discussed all this in last week’s Health Care News podcast. You also can subscribe to the Health Care News podcast feed.

— Benjamin Domenech



John R. Graham of the Pacific Research Institute writes in criticism of Karl Rove’s advice to the new Republican House majority in the Wall Street Journal, and writes accurately, that Republicans need to approach health reform by completely reordering their bullet points. Rove’s advice:

But they should also present conservative alternatives — such as permitting Americans to buy health insurance across state lines, allowing small businesses to pool their risk to get the same discounts that big businesses get, giving the tax advantage of having insurance to the individual as well as the employer.

To which Graham responds:

More freedom is always better, but the order in which these reforms are listed is backwards. … To understand this, first realize that what we call health “insurance” is not really insurance, but pre-paid medical care. We launder almost all our medical costs through health plans, which is just fine for the health plans but adds lots of administrative costs. It’s as if your household insurance also paid your rent or mortgage, furnished your home, and gave you a “free” lightbulb when one burned out. Obviously, your premium would skyrocket from what it is now. Then suppose that, because of historical accident, the federal government did not give you a mortgage-interest tax deduction, but excluded the value of your home from your taxable income, but only if your employer “gave” it to you as a benefit.

The results would be similar to what we see for health care today: Wages would stagnate as the share of our income dedicated to housing increased; the design and furnishing of homes would satisfy the needs of corporate and government bureaucrats instead of residents; and people would automatically lose their homes when they changed jobs.

This is a key error, one that many Republicans have made. If there is one thing the incoming crop of leaders must recognize, it is how muddled this system is, and how desperately it needs to be changed in order to achieve a true marketplace for health care in the United States.

SOURCE: National Review


In another forward-looking piece, Tom Miller, a resident fellow at the American Enterprise Institute and co-author of the forthcoming book What Will Happen to You Under ObamaCare? (which may eventually consists of one page, with the sentence “Nothing, since it was repealed”), writes at Forbes on what Republicans should consider now that they have a seat at the table:

Until the next presidential election, the short-term tactical agenda for the new de facto majority in Congress remains mostly defund, delay, and debunk. Initiatives to reduce or cut off funding for implementation of the next round of ObamaCare need to be targeted narrowly to succeed. Republicans would be wise first to approve not only a budget resolution but also most appropriations bills, before trying to defund the most vulnerable chokepoints in ObamaCare’s implementation. Trying to wind back the ObamaCare implementation clock so that it doesn’t get so dark so early is a more promising approach. Congressional appropriations riders could attach new conditions that must be met before proceeding further. While intensifying the spotlight of congressional hearings and investigations on ObamaCare’s birth defects and early ailments, Hill Republicans should challenge the next Congressional Budget Office director to re-examine several of CBO’s previous budgetary assumptions (particularly involving whether many employers will drop private coverage). Real health reform beyond the next few years requires not just repealing what cannot work, but enacting new policies that will. To cut the political dependency wires that connect ObamaCare’s layers of costly insurance coverage promises to its sweeping control over health care decisions, Republicans must offer more than a return to the pre-Obama status quo.

“Defund, delay, and debunk” has a nice ring to it, and is far more achievable within the next two years than the call to “repeal and replace.” And Miller’s last point is key as well, acknowledging that true pro-consumer health reform is still needed and advocating for it. For more on one potential HSA-based reform, read this piece by Thomas Cheplick in the latest Health Care News.

SOURCE: Forbes


Richard Epstein of the Manhattan Institute writes on the unintended ramifications of the push to expand conflict of interest rules, which holds the potential to harm innovation and hurt patients:

An active partnership between science and commerce underlies Americans’ high standard of living, including their state of health and the medical discoveries and treatments that have steadily improved it. But a mounting wariness toward collaborations between employees of research institutions and public agencies and those working for pharmaceutical companies and the like, as expressed in increasingly broad conflict-of-interest rules and prohibitions, threatens to disrupt what has been a wide-ranging and productive exchange of knowledge and information. Populist in its objection to scientists’ enrichment and puritanical in its belief in money’s certain corruptive powers, this new regulatory philosophy is likely to degrade the quality of research and delay the provision of lifesaving medicines and treatments.

Thomas Sullivan has a strong take on Epstein’s report, noting, “Continuing down this path will only hurt patients and future generations. As such, agencies and institutions should seriously consider Epstein’s recommendations before it is too late for patients.”

SOURCE: Manhattan Institute


There is perhaps no greater failure of a constituency by its lobbying group than the steps undertaken by the AARP in the name of the interests of American seniors during the course of the debate over Obama’s law. Now, their own staff and retirees–all told, more than four thousand people–are about to experience the ramifications in the form of a 13 percent premium increase:

AARP’s endorsement helped secure passage of President Barack Obama’s health care overhaul. Now the seniors’ lobby is telling its employees their insurance costs will rise partly as a result of the law. In an e-mail to employees, AARP says health care premiums will increase by 8 percent to 13 percent next year because of rapidly rising medical costs. And AARP adds that it’s changing copayments and deductibles to avoid a 40 percent tax on high-cost health plans that takes effect in 2018 under the law. Aerospace giant Boeing also has cited the tax in asking its workers to pay more. Shifting costs to employees lowers the value of a health care plan and acts like an escape hatch from the tax. …

AARP officials said medical inflation is the main reason employee costs will be going up. The health care law is “a small part,” said David Certner, legislative affairs director.

The AARP spent millions advocating for Obama’s law and, in so doing, betrayed the interests of its millions of members. For more on their operation, read Mark Tapscott‘s piece from last year.

SOURCE: Yahoo News


Update from the world of the new temperance movement: A British study published in the Lancet grabbed some headlines by making the case that alcohol is the “most harmful of all drugs”–because, according to the study, it is more harmful to others. As summarized by the AP article on the topic, which bears the subtle and incorrect headline “Alcohol More Lethal than Heroin, Cocaine”:

Heroin, crack cocaine and methamphetamine, or crystal meth, were the most lethal to individuals. When considering their wider social effects, alcohol, heroin and crack cocaine were the deadliest. But overall, alcohol outranked all other substances, followed by heroin and crack cocaine. Marijuana, ecstasy and LSD scored far lower. … Experts said alcohol scored so high because it is so widely used and has devastating consequences not only for drinkers but for those around them. “Just think about what happens (with alcohol) at every football game,” said Wim van den Brink, a professor of psychiatry and addiction at the University of Amsterdam.

While Professor van den Brink is referring to a different kind of football, anecdotal evidence from college football games this autumn indicates that “happens with alcohol at every football game” is that it makes for a great deal of fun.

SOURCE: The Lancet