Kathleen Sebelius Thinks You’re An Idiot

From NRO, By Yuval Levin, July 10, 2012

Cathleen Sebelius

In preparation for this week’s House vote to repeal Obamacare, HHS Secretary Kathleen Sebelius has an op-ed in today’s Washington Post heralding the wonderful effects the law has supposedly already had on American health care. The argument she makes is just stunningly dishonest, and is readily refuted by data and analysis that the administration itself has made available. It’s astonishing that the administration expects anyone to buy this stuff.

Sebelius argues first that:

In the decade before the law was passed, national health expenditures increased about 7 percent a year. But in the past two years, those increases have dropped to less than 4 percent per year, saving Americans more than $220 billion.

It takes real chutzpah for the Obama administration to make this argument. As the administration’s own actuaries and experts have pointed out, the slower growth of health spending has been very largely a product of the weak economy of the Obama years, and has essentially nothing to do with Obamacare. In fact, the very HHS document that the online version of Sebelius’s op-ed links readers to in that very paragraph quoted above says “the low rate of estimated growth in overall health spending in 2011 largely reflects the lingering effects of the recent recession and modest recovery.” Modest indeed.

What’s more, that very same document (prepared by the National Health Expenditures team at HHS, whose members work for Sebelius) also says “In 2014, national health spending is projected to rise to 7.4 percent, or 2.1 percentage-points faster than in the absence of reform.” In other words, even the administration expects that Obamacare will cause health-spending to accelerate significantly, not to slow. Sebelius’s argument plainly implies the opposite.

She then goes on to attribute the slower growth of health-insurance premiums to Obamacare too, writing:

You can see the same trend with premiums. Between 2000 and 2009, the average family premium more than doubled, from $6,438 to $13,375, an annual increase of 8.1 percent. From 2009 to 2011, family premiums still rose — but at a rate 25 percent lower.

But again, the same document she links to above, prepared by her own employees, plainly attributes this slowdown to the broader economic slowdown, noting that “this slowdown in growth is due primarily to a decrease in the number of people with private health insurance” as a result of layoffs and cutbacks by employers. And the report projects that Obamacare will cause premiums to rise faster, not slower, once its provisions fully take effect.

Sebelius then argues that the fact that the proportion of small businesses still offering insurance coverage hasn’t fallen yet means that critics of Obamacare are wrong to argue that it will. But those critics make that argument because if Obamacare is permitted to take effect in 2014 it will create huge incentives for small employers to drop coverage and dump their workers into the new exchanges. The fact that this hasn’t happened yet hardly proves anything—as with her first two points, Sebelius is trying to attribute effects to Obamacare that have little or nothing to do with it, since its core provisions have not yet begun to operate.

And finally, to top it all off, Sebelius argues that “the health-care law has strengthened Medicare’s long-term outlook, adding eight additional years to the projected solvency of the Medicare trust fund.” But of course, the law avoids any structural reform of Medicare—assigning the task of keeping costs down to a board of price controllers who are somehow expected to achieve what price controls have failed to do in Medicare for decades—and as Medicare trustee Charles Blahous has pointed out the added years of solvency are a function of double counting. As Medicare’s own actuary (who, again, works for Sebelius) has put it:

In practice, the improved HI [trust fund] financing cannot be simultaneously used to finance other Federal outlays (such as the coverage expansions) and to extend the trust fund, despite the appearance of this result from the respective accounting conventions.

Sebelius sums up her argument this way: “Since the Affordable Care Act was passed, national health spending is rising at a slower rate, health insurance premiums are rising at a slower rate, small-business coverage is holding steady and Medicare is on a stronger financial footing.” It is not an exaggeration to say that every part of her argument is either intentionally grossly misleading or untrue.

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