Chanting Points Memo: “Only 4.5%!”

A friend of mine on Facebook (who admits he based it on a statement by Senator Michelle Benson, on the Dave Thompson show) notes the wierdness of the state’s math in arriving at the “4.5% increase in MNSure Premiums” number that the media is trumpeting.

He put it this way: If a fast food restaurant serves 500 customers and has $5,000 in the till at the end of the day, that’s an average of $10 per person.

If a coffee shop next door has 5 customers and makes a grand total of $25, they averaged $5 per sale.

So what was the average amount spent by customers to those two stores?

$7.50 – the average of $10 and $5? Or…
$9.95 – $5,025 in total receipts divided by 505 customers?

If you’re a Democrat, you picked “1” – which is the average price of two items, but is not the average amount spent by the customers If you undestand economics, you picked “2”.

What the state has done – and the media has reported more or less uncritically – is tell us the average price of the plans (that are still on the market). Not the average amount customers will have to spend to stay in the exchange – which includes nearly 2/3 of all MNSure customers who lost their lower-priced Preferred One plans, and who will be paying at least 20% more.

The state’s spin is dishonest. The media uncritically running the spin is an abdication of their purported job of keeping government honest.

Posted

October 2, 2014

Campaign ’14, Chanting Points Memo, MNSure Debacle

Mitch Berg

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29 responses to “Chanting Points Memo: “Only 4.5%!””

Powhatan Mingo

October 2, 2014

I’m still waiting for RickDFL to send me my promised check for $2500/yr. I’m willing to accept a payment plan.
Seflores

October 2, 2014

This is ridiculous. The DFL Dominated Media Culture wouldn’t think twice to report what a scam this is if MNSure were a private business.
If state economists said because Rainbow Foods left town we’re not going to count the cost of the food they sold last year in a food cost increase calculation because people can’t shop there any longer, they’d get laughed out of the room. Doesn’t matter if people shopped at Kowalskis or Rainbow, food costs more today than it did a year ago. Same with MNSure – if it’s more expensive to buy a policy today than it was a year ago – much more expensive if you were a Preferred One customer that has to go elsewhere now – it’s more expensive.
Seflores

October 2, 2014

They should start calling him Governor Tom Petters. Although based on his debate performance, Swiftee’s GovJimBeam still fits well.
Chuck

October 2, 2014

Its like which schools are better, Texas or Minnesota. Minnesota students test better. But Texas has much higher minority enrollment. Texas schools educate black and latinos better than Minnesota does, but the dominante white enrollment in Minnesota brings the overall scores higher here.
mnbubba

October 2, 2014

The most compelling reason to elect Republicans to office is to incent the media to do its fucking job.
Powhatan Mingo

October 2, 2014

I wonder if any o’ them journalists has ever thought about what requiring the young to subsidize the insurance costs of the old would do to the economy? Young people tend to spend more on consumer goods, older people tend to save more.
Emery

October 3, 2014

“Older people” have a larger percentage of the wealth than younger people. These schemes are nothing but a huge transfer of wealth from the young to the indolent old. Conservatives should instead be insisting that we pay for our benevolence out of our own pockets rather than our children’s and our grand-children’s pockets.
Joe Doakes

October 3, 2014

Conservatives do insist on it, Emery, which is why Obamacare was passed by Democrats without one single Republican vote, and why Conservatives hope to retake the Senate and eventually the Presidency so we can repeal it without facing Democrat obstruction in the Senate or veto in the White House.

Doesn’t do much good to introduce legislation Democrats will block. Better to bide our time, while constantly reminding people how bad the system is so that when we get a chance to act, they’ll be glad we did.
Emery

October 3, 2014

All benefits should be means tested.
Joe Doakes

October 3, 2014

Troll bait, Emery? Okay, I’ll bite.

The American government has no Constitutional authority to give “Benefits.” If people need reduced-price medical care, they should go to charitable hospitals run by nuns. Oh wait, we don’t have them anymore, government drove those hospitals out of business after government decided to take over charitable giving in 1964 under the rubric of “entitlements” and nuns with Obamacare in 2010. The Democrat system might work fine as long as it lasts, coasting on the remnants of the prior system. But when government runs out of Other People’s Money and the charitable hospitals are gone, health care services in this country are going to SUCK.
bikebubba

October 3, 2014

Regarding Emery’s proposal, means testing is part of what got us to this point. Think about it; for Medicaid, student grants and loans, and the like are all predicated somewhat on income, but also on assets. And thus a friend of mine from college–the son of a plumber who was foolish enough to save money while driving his vans into the ground–found that he was not eligible for student loans and grants, but his cousin–son of a lawyer whose family always had the latest and greatest but didn’t save money–was.

And set up like this, we wonder why it is in fact true that Bill Gates’ net worth exceeds that of something like the 50 million poorest Americans. And why there is so much need for these means-tested programs.

Well, duh.
Emery

October 4, 2014

First of all, what is on offer with the ACA, and what is given to Medicare and Medicaid recipients, is not simply health insurance. Health insurance would cover costs that exceeded a certain deductible. What is on offer, and is legislated in detail, is a full health care plan. People are, in fact, required to invest in a health care plan, just as seniors get full coverage with Medicare, not simply insurance for catastrophic medical charges.

Second, young people have much lower health care costs, but have many other expenses; children, housing, etc. Old people have fewer expenses other than healthcare. But the ACA explicitly forbids discrimination on the basis of age, and limits the premiums that old people can be charged. It forces insurers to compensate for underpayment by old people by overcharging young people. The ACA, is yet another tax on the young working people to pay for social programs (“benefits”) for indolent boomers who have never had to pay for the government they vastly expanded, leaving it for the next generation to settle their debts.

The ACA is a good deal (as is Medicare) if you were planning to buy the coverage mandated by the law. If so, then the law will make it cheaper for you. It is cheaper because those people who did not plan to buy coverage will now have to, subsidizing those who were going to buy a health care plan anyway. Because the ACA does little or nothing to actually reduce health care costs, it is a zero sum game. Subsidies for one group must be coming from another group. In this case, one of the groups doing the subsidizing is young people who would have chosen not to buy health insurance, living with the risk instead.

The only reasonable choices are: a) Everybody pays the same regardless of their health, b) Everybody pays a fraction of their own costs, or c) Everybody is entirely responsible for their own healthcare.

Nobody is prepared to adopt option c, so public policy is limited to choosing either option a or some degree of option b.
Emery

October 4, 2014

Mr. Doakes:
America has a very big problem which it cannot easily solve:
How to feed 1.2 million American lawyers?

I see the troll in you is strong. ;^)
Powhatan Mingo

October 4, 2014

I am trying to think of an ethical system that demands that each person be judged as an asset or as a liability to the ruling class.
Emery

October 5, 2014

You should try and think of a sensible way to pay for all the healthcare you would like to bestow on everyone and their grandmother.
Powhatan Mingo

October 5, 2014

“You should try and think of a sensible way to pay for all the healthcare you would like to bestow on everyone and their grandmother.”
If you can find an example of me saying anything like that, I’ll give you a dollar, emery.
Emery

October 6, 2014

You might start with your comments regarding: “lebensunwertes leben”. Which would imply you support endless benefits. Do you had a sensible plan to pay for your scheme?
Powhatan Mingo

October 6, 2014

You might start with your comments regarding: “lebensunwertes leben”. Which would imply you support endless benefits.
Not true at all, Emery. One does not need to support “endless benefits” to deny the government the right to decide who lives and who dies. Do you think that the only people who matter in health care are the individual and the state?
Emery

October 6, 2014

Would you support denying cancer treatments that average less than a 3 month extension on life to Medicare patients if that would lower your payroll taxes by 5%?
Powhatan Mingo

October 6, 2014

Would you, Emery?
I can pose hypotheticals all day.
You seem to come at this with an idea that either the government must pay for everything that would extend life (a position you think I hold that I do not hold) or the government must let people die for want of care.
Note that “the government” is the only actor of consequence.
Powhatan Mingo

October 6, 2014

Also, Emery, I notice you did not answer my question : “Do you think that the only people who matter in health care are the individual and the state?”
This is an incredibly important question. You can’t really start to discuss health care delivery systems unless you answer it.
I do not believe that the only people who matter in health care are the individual and the state. The state should be least important actor of all. It should make no decisions whatsoever, because it is impossible for the state to determine the value of a life other than in gross, statistical terms.
Individuals who value human life the way the state values human life are called “psychopaths”.
Emery

October 7, 2014

It’s not as if Medicare-for-all is a realistic solution. Medicare would have to drastically change. We first have to acknowledge we’re dealing with a limited resource. Paul Ryan wants to hand Americans a subsidy check and let Americans go discover the hard truths about healthcare for themselves. That may be cruel and economically inefficient, but it deals with the difficult political reality that the public is unwilling to let the government dictate their health care. I think that plan would be disastrous, but I concede his political point.
Powhatan Mingo

October 7, 2014

Health care is what economists call a scarce good. Demand exceeds supply, so it is rationed. It’s not a choice to ration health care. If demand did not exceed supply it would not be a scarce good.
Government or the market can ration health care. In most economies, health care is rationed by a mix of government policies (laws and subsidies) and the marketplace.
It is insanity to believe that government can do an objectively better job of rationing health care than the market. It is also insanity to believe that the market can do an objectively better job of rationing health care.
This is because there is no objective measure of the value of healthcare. Health care costs are easy to measure, but they do not reflect the value given to health care by the people that consume it.
bikebubba

October 7, 2014

If one believes that government can effectively limit demand for healthcare, please explain to me why Medicare and Medicaid are spending something like 10-15 times more than was projected by the Johnson administration. Honestly….it’s not like this hasn’t been known for decades.

You want to rein in spending, you have to go whole hog with government rationing (good luck getting that through Congress), or you can work to sever the link between employment and health insurance, so that people have an incentive to reduce their overall expenses.

Not wanting death panels, I’ll go for the latter, thank you very much.
Powhatan Mingo

October 7, 2014

I always thought it would be great to have something like unemployment insurance that picked up your health insurance bill temporarily if you became unemployed.
Of course the government would end up taxing it as income, like they do with unemployment insurance.
That was high on the list of stupid things Reagan did. “Yeah! Let’s balance the budget by taxing people with no job!”
I notice that none of the Dem congresses or presidents have taken that tax off the books.
Emery

October 7, 2014

Bike: Decoupling employer health benefits should be the goal.

PM: Better yet, remove all tax breaks, and treat all employer contributions as taxable benefits. This country spends too much on healthcare already. Why encourage it with tax breaks. If you want to offer government subsidies, do so as a tax credit to individuals, not as a tax deduction to businesses or individuals.
Powhatan Mingo

October 7, 2014

Treating my company insurance as a taxable benefit would cost me about $3k/year.
Multiply by 60 million or so and I wonder what that would do to consumer spending? If the company increases my wages by $3k to make up for up, that will decrease investment and growth.
TANSTAAFL. You can’t increase my cost of healthcare without reducing my spending and savings elsewhere. I might, for example, choose to buy a used car instead of a new car, or make that old sofa and love seat last another year before I replace them.
Emery

October 8, 2014

Yes, all good points.
Compensation should be paid in cash and would include the value of your employer paid insurance benefit. Companies, Walmart in this instance, will abandon their health plans, pay the penalty, and leave everyone to the exchanges. The subsidies for which will overwhelm the government in excess cost. And then we’ll see the real reform. It’ll probably look a lot more like Paul Ryan’s plan than Obama’s.
bikebubba

October 8, 2014

If they raised the exemption value by about three grand or so, I think I’d be very happy to give up the deductibility of medical expenses. At the very least, make the tax treatment equal.

And then watch companies scurry to keep entrepreneurially minded workers for whom insurance had served as a golden handcuff. It could be really entertaining.