Checking Up ON the "Faux" Fact Checkers

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Late last month, the Center on Budget and Policy Priorities (CBPP) stopped just short of reaching "in high dudgeon" in lambasting a recent Kathleen Parker column in the Washington Post that allegedly echoed many of the "exaggerated claims, misleading complaints, glaring omissions, and blatantly false arguments" of "health reform's opponents."

Oh, my! To be fair (unlike the CBPP coauthors of those overheated accusations)), not all of the criticisms proffered by Robert Greenstein, Edward Park, and Paul Van de Water are completely off base.

For example, employment data don't provide a clear-cut case for a big jump in part-time work due to the 30-hour threshold for the employer coverage mandate (coming soon, perhaps in 2015...) under the Affordable Care Act (ACA). A long list of anecdotes still can't be picked up consistently within the larger aggregates of survey data by the Bureau of Labor Statistics. Changing demographics within the U.S. labor force and the unusually slow recovery from the Great Recession further complicate time-series analyses. Hence, we are left with the usual dodge by forecasters: the estimate of "no more than a one to two percent increase in premiums in the long run" that seemingly applies to every potential regulatory burden for which analysts lack at least half a clue.

Similarly, the direct effects of Obamacare on overall employment growth can be, and have been, exaggerated. Of course, the CBPP coauthors prefer to cite their notions of "non-partisan" economists for the conclusion that there is "no sign" that health reform is negatively affecting hiring. However, relying on apologists for current Obama administration policies like Mark Zandi or the self-justifying re-forecasts by the Congressional Budget Office isn't exactly a wide survey of macroeconomic opinion. For example, several other recent analyses of the ACA's work disincentives through higher marginal tax rates and expanded public health insurance eligibility suggest reasons for serious concern.

In another case, Greenstein, Park, and Van de Water misdirect their fire at only the edges of their target. They decry the shortcomings of the new plan of the House Republican Study Committee (RSC) - the American Health Care Reform Act -- to swap the tax exclusion for employer-based coverage with a standard tax deduction for everyone who purchases health insurance as "worth little (or nothing)" to the vast majority of the uninsured. If they had bothered to read the proposed bill's actual text, they might have discovered that the above-the-line standard deduction would apply not only to federal income taxes, but also to payroll taxes (which almost all working Americans do pay!) in section 203 of the bill. That doesn't mean that there are not flaws in the pure standard deduction approach (it's at least a bit more regressive compared to other potential reforms and it can't adjust for other risk- and market-based differences among its would-be beneficiaries), but those shortcomings could be reduced with other tax policy adjustments.

The three CBPP coauthors also point out that when the federal government makes employer contributions to the cost of coverage for members of Congress and their personal staff, this does not constitute "a special break" - even after an ACA amendment required the latter to enroll in plans offered through the law's new exchanges, beginning in 2014. Actually, that issue is more of a "No, but Yes." No, the poorly drafted amendment did not explicitly remove the legal authority for contributions by the federal government as an "employer," but Yes, the subsequent rule to implement it by the Office of Personnel Management does illegally violate several other statutory provisions controlling the Federal Employees Health Benefits program (for example, what constitutes an approved health benefits plan)) and the ACA's small-business SHOP exchange eligibility limits (only employers with no more than 100 employees are allowed to choose such coverage before 2017).

It may be one thing to fudge and fuzz the edges of policy details as a would-be fact checker. It's another to misstate or ignore contrary "facts" completely. In unequivocally asserting that the RSC plan "isn't a serious alternative to health reform," Greenstein, Park, and Van de Water claim that if someone had continuous coverage in the individual market (and apparently needed to switch plans with a pre-existing health condition), they would be eligible under the RSC plan only for coverage through a high-risk pool. That is flat out wrong, as someone who actually reads section 301 of the proposed House bill's text, and understands the definition of continuous coverage, would discover. It guarantees full portability from one plan to another for anyone who maintains such continuous coverage under either individual or group plans (extending the pre-ACA guarantee under the 1996 HIPAA provisions for switching from one employer group plan to another such employer plan, as well as eliminating the requirement to exhaust more expensive COBRA coverage options first).

The RSC plan does fall very short in its level of initial federal funding for the expanded high-risk pool coverage it proposes to handle individuals who fail to maintain continuous coverage and, due to their health status, either cannot find any coverage at all or only limited coverage with a very expensive risk premium. I've previously told House Hill staffers and others that the bill's funding of $25 billion over 10 years needs to be significantly increased, at a minimum. Then again, the ACA tried to get away with an even lower amount of funding for more than three and half years of so-called Preexisting Condition Insurance Program coverage and then had to close its doors to new applicants almost a year before it was due to expire.

The CBPP complaint that the RSC's proposed high-risk pools will require future appropriations by Congress rings hollow. Open-ended health entitlement programs programmed to increase automatically and hide much of their full costs through regulatory cross-subsidies and mandates have provided the main fuel for perpetual budget deficits, massive public debt obligations, and distorted health care pricing. It remains more advisable to provide relatively generous, but capped, budget authority for several years of high-risk pool appropriations that can be adjusted for actual evidence of greater or lesser need.

About a dozen years ago, the Center on Budget and Policy Priorities was described in one book - Seeking the Center -- as, during the 1980s and 1990s, gaining "a reputation for quick, thorough, and objective analysis of taxing and spending proposals." What a difference another decade makes. One out of three as a "faux" fact checker - quick, sloppy, and biased -- doesn't cut it today.


Mr. Miller is a resident fellow at the American Enterprise Institute, and the co-author of Why ObamaCare Is Wrong for America.

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