POLICY: Lies, half-truths and irrelevancies in defense of mean-spirited politics

My spies tell me that this WSJ article by Bush adviser Allan Hubbard is packed with more half-truths per inch than even stuff emanating from AHIP. But I've lost my WSJ access, as as I won't pay money to Mr Murdoch on principle --after what he did to NSW Rugby League--I can't get only get the the first part unless I subscribe. Can someone send me the rest of the text?

As it turns out, the whole thing is a defense of the upcoming Veto for SCHIP renewal.

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Here's the whole piece with my comments

There aren't many issues in Washington that everyone can agree on these days. But here's one: Our health-care system needs serious reform.

Not a lie

Deciphering the forms you get when you take your child to the doctor is very difficult. Small business owners who provide health insurance for their employees struggle to afford skyrocketing costs. Many communities don't have a single practicing ob-gyn because the risk of lawsuits has run them out of town.

Mostly, not a lie (let's save the malpractice arguments for another day...)

The problems are clear, yet there is great disagreement about what to do about them. What we need is an honest look at what's right with our health-care system, what's wrong with it and what we can do to improve it.

Not much of a lie (although the "honest" part is a little troubling).

Let's start with what's right. America's private system of medicine is the world's finest. It taps into the efficiency and flexibility of competition and markets. It puts doctors and patients in charge -- not government. It gives us the world's most talented doctors and nurses, the most advanced hospitals and the most promising medical research. Americans with access to this system receive outstanding care -- and people from around the world come here to benefit from it.

Good. Now we're talking. "The world's finest". Funny because in many studies the underfunded VA--not private medicine--does better than private medicine. Let alone private medicine or even public medicine in other countries. So this is a lie. And the "taps into efficiency and flexiblity of markets" line. That's what causes the "forms you get when you take your child to the doctor".

Of course, there's also a big problem. Access to high quality private health care is getting so expensive that many can't afford it. Growing numbers of Americans depend on the government for coverage. That creates a bureaucratic maze for them, and weakens the system of private medicine for all. As President Bush summed it up recently: "America's health care is too costly, it's too confusing, it leaves too many people uninsured."

If private health care is too expensive, shouldn't the wonders of the market have made it ripe for someone to come in and provide it more cheaply? But let's not worry about that. After all even the President--a busy man with much on his plate--has noticed that there are problems with health care. He does though think that people poorer than him should get it in the emergency room. 

So how do we fix the system? The president agrees with the many members of Congress -- Democratic and Republican -- who believe we have an obligation to ensure that poor kids have health insurance. The State Children's Health Insurance Program (Schip) has been covering poor kids for 10 years and now is up for reauthorization. The president supports reauthorization, his budget boosts funding for poor children in Schip, and he is prepared to sign a bill with appropriate funding increases.

This is a lie hiding behind some dishonest proposals. Put it this way. If there were no SCHIP would Bush support its creation in any form?

The president differs from some in Congress on how to cover children in middle-class families and other Americans. For example, one bill, sponsored by Sens. Max Baucus (D., Mont.) and Charles Grassley (R., Iowa), would expand Schip dramatically beyond what it is intended to do. And it would be a dangerous step down the path of government-run health care, ultimately resulting in fewer options and lower quality care for American families.The Baucus-Grassley proposal would expand Schip to cover many children who are not actually poor. A family of four making $82,600 would be eligible for taxpayer-funded health insurance.

Unless I'm mistaking the inner workings of the bill, that's a lie, or at least is economical with the truth. "A family of four making $82,600 would be eligible for taxpayer-funded health insurance" for their children, and given that SCHIP is usually not implemented fully, it's a "might" not a "will" in terms of getting it.

It would also cause many people to drop their good private coverage and move to taxpayer-funded, government-run health care. In fact, the Congressional Budget Office has estimated that for every two people who would join Schip under this bill, one would drop his/her private health insurance -- a striking example of "crowd-out" that is contrary to the purpose of the program.

The crowd-out effect is probably true. But lHubbard's leaving unsaid that the private health insurance market that some kids would leave is a disaster in its ability to save costs or waives pages of forms at the doctor's office. Oh, wait. he did say it a few paragraphs ago!

Finally, this bill would run up a huge tab -- $71 billion over 10 years -- and would impose new tobacco taxes to pay for it. But even a large tax hike won't pay for this bill's vast expansion of the Schip program. Instead, the bill resorts to a massive budget gimmick to hide its true costs. This trick makes it appear that Schip's costs under this legislation will steadily increase from $5 billion this year to $16 billion in 2012 and will then suddenly drop to $3.5 billion a year -- a steep fall that won't happen of course because millions of kids would lose coverage.

Not a lie but very funny. First that amount is 1/10th the increase in health care spending from the taxpayer that Bush rammed through the Congress in 2003 in the MMA. Where was the White house's rhetoric on saving money then?

Second, the trick of making money disappear in the "out" years was invented by this Administration in its heinous 2001 Act of "borrowing from tomorrows workers for tax-cuts for today's wealthy". Those cuts are all expiring soon too. But not until after this Administration is gone.

In short, the Baucus-Grassley bill would weaken the part of American health care that is working well -- our private system of medicine -- while doing little to address the real problem for most Americans, which is the cost of care.

Another lie. It would probably improve the profits of the private insurance industry as it would provide a way for them to further skim the risk pool, and dump the remainder onto the taxpayer. But let's be real, if the private market works so well, why are costs "the real problem for most Americans".

Well of course, it's because the private market isn't being allowed to work by those dastardly government people.

If Congress really wants to talk about reforming American health care and getting more people covered, there is a smarter way -- a way to build on the strengths of our private system while addressing its shortcomings. And it starts with addressing one of the root causes of the problems in health care -- the federal tax code.

The problem is straightforward: Under today's tax code, people who are fortunate enough to get health insurance through their jobs get a big tax break -- but those who have to buy coverage on their own get no tax break at all. That is not fair, and it is not wise. It makes it impossible for millions of Americans who work for small businesses or who are self-employed to afford health insurance. And it drives up the cost of coverage for us all.

Two lies, one big one small, and one truth. First the small lie. Self-employed people can deduct their insurance on their taxes. I have done every year since 2003. It's employed people who don't get health insurance through work who cannot make that deduction. But given that the vast majority of those are on very low wages and pay very little income tax, giving them a tax deduction won't make much difference to their ability to buy health insurance.

The truth is that making health insurance tax deductible does drive up the cost of health care.

So what's the genius solution from Hubbard? Do more of it!

So President Bush has proposed to level the playing field for health insurance. Under his plan, every family with private health coverage would receive a standard tax deduction of $15,000 -- no matter where they get their health insurance. This deduction would encourage more people to buy their own health insurance, just like the mortgage interest deduction encourages more people to buy their own homes. Some have suggested that a flat tax credit could also achieve the president's goal of leveling the playing field, and he has signaled that he would be open to that option.

These tax reforms are simple, but their effect would be revolutionary. More than 100 million people who are now covered by employer-provided insurance would see lower tax bills right away. Those who now purchase health insurance on their own would get a tax benefit for the first time. And millions of others who have no health insurance would be able to purchase private coverage

Not a lie--just dumb. Notwithstanding the business practices of many of our leading health plans, the reason that health insurance is expensive is because health care is expensive. Only some 6% of Americans buy their insurance in the individual market. So using that as the fulcrum to reform health care and reduce its costs is a non-starter.

But what giving everyone a huge tax-break might do is break the "solidarity" of what's left of the  insurance pool in the employer market. If younger and healthier employers left to buy their own coverage in the individual market, it's likely that more employers will find their risk profiles starting to look more like GM's than say Google's. Which will help hasten the end of that market while the Administration has done nothing to reform the gong-show of the individual market (even along Romney-care lines) that these people will go into.

To reduce the ranks of the uninsured even more, President Bush has also proposed to make federal help available to states that ensure all their citizens have access to basic private health insurance.

No point even pointing out the level of that lie. "All their citizens"? C'mon

There are sharp contrasts between the president's plan to reform the tax code and the Baucus-Grassley proposal. Reforming the tax code would bring more affordable health insurance to 100 million Americans, while Baucus-Grassley will not change the cost of coverage for most people. Reforming the tax code would reduce the ranks of the uninsured by as many as 20 million, while Baucus-Grassley would cut the uninsured by fewer than four million. And reforming the tax code would achieve these goals without increasing taxes, while Baucus-Grassley would mean more taxes, more spending and more control for federal bureaucrats in Washington.

For taxpayers, families, patients and businesses, the choice is clear. Therefore President Bush will continue to work with members of both parties for reforms that make health care more affordable and more available for all Americans while continuing to support Schip for poor kids.

Actually, I'm not sure he's lying here. SCHIP is a dog-meat "separate but equal" program for the poor. Any advocate of SCHIP would trade it in a heart-beat for a proper inclusive universal insurance program, and we all know that programs for the poor are treated poorly. Ten years after SCHIP we still have lots of  uninsured children, and it's clear that the Administration and perhaps much of the country just doesn't care. Apparently Baucus and Grassley -- two conservative moderates -- do.

Of course the concept of moving 190m Americans to a tax-credit based system with no concurrent reform of the individual market is a level of insanity that even Republicans in Congress knew was a non-starter when they ran the place--no matter how much looney Rooney and his buddies wanted it. Now that the Republicans don't run the Congress, the best advocates for change can hope for while Bush is still around is incremental moves like SCHIP expansion. In the end it doesn't mean too much--the increase in health care costs that our current system churns out will put more people into the public sector or the uninsured population than SCHIP will fix.

But in the meanwhile there are some kids who'll get health care because of SCHIP that won't if it's not around. And the upcoming SCHIP veto is just petty vindictiveness on behalf of a totally discredited White House.