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    The Times "Pity Party"

    By Michael Maiello on Sun, 12/22/2013 - 1:23pm | Politics

    Atrios and friends frequently take The New York Times  to task for its coverage of the economic issues facing its affluent readership.  The problem, an old one, is that the Times reader typically makes a lot of money compared to the average but they do not typically make so much money that they are care free wealthy.  This is because the economy does not actually grant care free wealth on too many people.  Heck, society is organized around the idea that not too many people can just do whatever they want all of the time.

    The scold is: "Quit your whining if your health care bill went up or if you lost your doctor.  For one thing, those things happened routinely before Obamacare and for another, if you think life is rough with a six figure salary, imagine like at $40,000 a year, which is what most people live with."

    The counter arguments are that this is politically dangerous -- these Times readers pay attention to politics.  Another is that these people live in expensive cities so they do not get the kind of bang for their buck they would get elsewhere.  That one never earns much sympathy.  One argument that I never hear made, but that should be, is that U.S. workers are routinely underpaid and we should view $40,000 a year as a travesty, not a reasonable baseline for American life.

    But, life is life and I understand the "world's tiniest violin" response to six figure earnings who are paying $1,000 a month for family health coverage, as in a recent Times example discussed at those links.  The argument against the complaint here is simply that this is a self employed couple bearing the full costs of their insurance.  It is not more expensive than it would have been prior to Obamacare, it's just that they don't have an employer picking up their share.

    The typical economist argument is that you should mentally deduct whatever your boss pays for Social Security and health care from your wages.  Absent those programs, that money would just be added to your salary, though you would have to pay it out for retirement and insurance so it would be a wash.

    I don't buy this.  I have no faith at all that if employers were driven out of providing health insurance that wages would rise by the previous cost of health care.  Wages might rise a bit but it seems likely, given experience, that employers would pocket some, if not most, of the difference.  The hard fact is that forcing self employed people to bear the full costs of health care and Social Security, with no tax advantage or subsidy, is a barrier to self employment.  I suspect that this is intentional and, again, that the country is just more governable when most people have to answer to a boss.

    Where the Times is probably wrong is in blaming Obamacare for all of this.  The problems are deeper than that.  The argument that certain people shouldn't complain because others have it worse is extremely problematic.  It accepts too much that is wrong in American life, including that too many people have it worse and that even those who have it well do not, for the most part, have it well enough.

    Topics: 
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    Comments

    Where the NYT is often clueless is in using a yuppie anecdotal like they did to start the article; it's one of their classic errors. ESPECIALLY BECAUSE the article, if read past that anecdotal, is making an important point for many other people that get turned off by such an anedotal.

    The point, reading the whole article, and reiterated in this chart is this major flaw in ACA:

    The example here is for a 60-year-old individual buying the Bronze plan ( the kind with a huge deductible) in Decatur County, Ga.:
    Earnings: $45,000; Premium: $1,730
    Earnings: $50,000; Premium: $8,696

    How can anyone support that? It's just plain wrong and needs to be fixed!

    If it's not fixed soon, I'd venture a guess that a lot of votes that might have gone to Dems in the past might be switched to the "kill Obamacare" party. People in the problematic age group happen to be known as reliable mid-term voters.

    The more I learn about Obamacare, the more fucked up so many parts of it seems. It really needed a lot more prep time, really wasn't ready for prime time. I really believe the Congresspersons who say they are getting an earful on it from constituents and I also believe that those constituents are complaining about real problems the law is causing them and not propaganda agents for Fox News. But I also want to know why they didn't read and study the bill and work on fixing the inherent problems beforehand. Maybe they deserve the earful they are getting; maybe they should even be thrown out of office after all. After all, despite the name, it's really their bill, not Obama's.


    by artappraiser on Sun, 12/22/2013 - 2:08pm

    Agree. The 50K guy would be 3K better off if he took a 5k pay cut? Or would he still wind up with the same income left over, 42-43K after ACA premiums?

    I see an expanding field of real and bogus entrepreneurs/scammers in the 'reduce your taxes/health care premiums/optimize your final income business as real accountants and swindlers serve, or prey on, a confused public. Profiting from befuddled/naive 'suckers' is a traditional American practice. As opposed to say, single payer, with clarity of funding and concentrated accountability.

    Hard to believe an ACA health care payment system so confusing and rigged, and still run mostly 'for profit' by the private sector, will be a lasting success.


    by NCD on Sun, 12/22/2013 - 3:57pm

    Actually, I think the problem is it's starting to look nearly as complicated as the tax code but there aren't any of those kind of advisors yet because nobody even understands it yet, even in the government! The supposed "facilitators" don't really know jack shit (personally know of wrong answers given in NY and CA,) they are just people trained to plug in data in fields on websites.

    It's basically been left up to journalists to figure it out, I'm not kidding.

    Where's the Congressional public omsbudsman explaining their new law and helping people understand it? Huh? The other option, going to the Obama administration, what a joke--we've got the clueless or the lying, the excuses, the admissions, the apologies, but not much help. Just "we screwed up" and continual last minute "fixes" that basically seem to screw things up even more.

    There's a perfect example at the end of the NYT article. This guy needs the kind of advice you can't get anywhere right now:

    Christian Johnsen, a bakery owner who lives with his wife and two children in Big Sky, Mont., and has an income of about $88,000, will probably be eligible for subsidies next year. As a result, the family could buy a midlevel insurance plan for about $697 a month.

    But if the bakery does better next year, the family could be asked to pay a lot more. Without any subsidy, the same plan would cost $822.

    Mr. Johnsen, who is 47, said he would like to buy insurance for his family. They have gone without it for the last two years, paying out of pocket on rare visits to the doctor. But he said it is hard to justify those prices to prevent an unforeseen catastrophe when so many real-world expenses demand his attention first.

    “I know absolutely that I’m going to need a new car in two years, but I don’t know that I’m going to have a catastrophic accident,” he said. “That’s the kind of debate that happens in our house.”

    Another example: I have a family member in CA who has been unemployed since Feb., His wife, an immigrant who he married in fall, works at a low-paying job. He got unemployment but it's going to be cut off. He's been paying for an expensive Cobra, it's ending. So I know for a fact from their finances that he should get Medicaid starting Jan. 1. But at first glance at their 2012, her income and his 2 mos. wages and severance makes him ineligible.  He find anyone to help him who knows what they're doing with someone who doesn't have a straightforward paycheck or salary income, certainly not the people who answer the phones at the state exchange.

    I am really starting to question the whole direct subsidy to insurers set-up. It is the main thing that fucked up the federal website, causing it to need all that complicated data and complicated application process creating the need to access many government entities. It's incredibly complicated. Why the hell didn't they just let people deduct it off/get a credit on their taxes themselves? People are used to that at all income levels, they know about earned income credit, they know about dependent tax deductions, they know about mortgage tax deductions....

    There are people at all income levels, even poor, that have more complicated finances than a salary job. Since most salary people already get employer insurance, I thought the goal of ACA was to help such people get insurance, not make it a another big complicated hassle to do so with a whole new intricate system they had to learn.


    by artappraiser on Sun, 12/22/2013 - 4:19pm

    Also, here's my prediction for the next Obamacare troubles, after March 31, around mid year. More people will finally have figured out the premium thing, and there will be starting to be some advisors who understand it as well. But that will be history because there is no open enrollment again until November (unless that gets changed! Deadlines, not writ in stone anymore.)

    What's next is back to 1989, pre Clinton-Perot-Bush town halls on health care. The plans seem to be mostly very limited network HMO's (even much of the Medicaid has this.) As people start to make major claims, we're going to start hearing all kinds of nightmare "out of network, my insurance won't cover it" stories like this one:

    Out of Network, Not by Choice, and Facing Huge Health Bills
    New York Times, October 18, 2013

    but more than in 1989 because unlike the family in the article, they will also be facing those high deductibles from the getgo.

    And as the small business exchanges kick up and they buy similar plans for their employees, and as more that are already offering plans switch to similar plans, that's going to get worse.

    Here's where I am coming from: not whining, but  I am hoping it's an eight-dimensional chess plan to get the country to come around to begging and screaming for some kind of single payer. (Transition though torture; all softened up for Hillary's fix?cheeky)


    by artappraiser on Sun, 12/22/2013 - 4:39pm

    Good points. The trouble for the Dem's is if the crap hits the fan on this, the public will be more sure the GOP will deep six ACA than they will believe the Dem's can 'fix it'. The link with the fact that 'ACA doesn't protect you from the bills from an out of network doctor in an in network hospital'.

    Single payer, although obviously the best and proven way to do national health care, will mean huge savings for the nation, but less $$ for insurance jobs, policies canceled, for profit insurance going under, as everyone jumps into cheaper single payer, and political graft from Wall Street health care corporations to politicians disappearing - less easy $$ from healthcare corporations for campaigns for election. Our Congress would actually have to do something good for the nation and not their pocketbooks, a tall order.


    by NCD on Sun, 12/22/2013 - 6:14pm

    Your last paragraph is pure fantasy, Art or you have been hitting the eggnog a bit too hard. Single Payer or at least the Public Option were very popular when this dog of a program was being constructed and the Ruling Class ignored the public then and even arrested some of them for begging to be heard so why should they listen now or any time in the future. Thinking that Hillary, even with the smiley face, will do anything vaguely Socialist like Single Payer is just begging to be disappointed again.


    by Peter (not verified) on Tue, 12/24/2013 - 1:55pm

    In my experience, they are NOT "mostly HMOs."

    There were a lot of PPOs when I signed on. And not all that expensive.


    by Anonymous PS (not verified) on Tue, 12/24/2013 - 10:06pm

    If I charged $2,000 to design a 45,000 SF building but $9,000 for a 50,000 SF building, I wouldn't get too many large commissions.


    by Donal on Sun, 12/22/2013 - 2:53pm

    Ninety percent of the country’s uninsured population have incomes that fall below that level, according to one recent analysis. As a result, the subsidies “are well targeted for people who are uninsured or underinsured,” said Sara R. Collins, an executive with the Commonwealth Fund, a private foundation that finances health policy research. “That is really where the firepower of the law is focused.”

    Even before the announcement on Thursday giving people with canceled plans the option of buying catastrophic coverage, the law permitted people to select such plans if the price of premiums in their area exceeded 8 percent of their income. The catastrophic plans are often less expensive and include three doctor visits and free preventive care, but require someone to pay almost all of the medical bills up to a certain amount, which is usually several thousand dollars.

    You're cherry picking the article...for one...as is clear from the above. In fact, the article itself is sensationalizing a phenomenon whose prevalence, they admit, they have no knowledge of. How many people are we talking about?

    For two, one relatively easy solution to this would be to eliminate cliffs and make cut-offs gradual.


    by Anonymous PS (not verified) on Tue, 12/24/2013 - 10:03pm

       I don't have enough knowledge to make a comment on Obamacare other than these three:

      1) So far it is a mess.

     

      2) Obama lied when he said everyone could stay on their current plans.

     

      3) I don't like forcing people to buy insurance.

      It will be interesting to see if this ruins the Democrats in 2014 and 2016.


    by Aaron Carine on Sun, 12/22/2013 - 5:37pm

    Why would it ruin the Democrats' chances in 2014 or 2016? If the Republicans had cooperated even slightly instead of fighting every attempt to bring some sanity to the out-of-control health care situation there wouldn't be this mess. 

    Will they be rewarded for their obstruction?  Will health care be so much better with them in control?  Or could we finally get closer to UHC if the Dems win it all? 

    Why gloat over the projected demise of the ACA?  What happens then?


    by Ramona on Sun, 12/22/2013 - 7:46pm

    (1) 72% of Americans polled hate, and fear, don't trust government (see my post on Gallup poll). The lack of trust in government has never been lower Pew Research, in fact showing a steady trend of decline since the early 60's.

    ACA is a poorly devised embodiment of a big government screw-up, benefiting mostly a small minority of the population. Obama 'should have, could have' set up some kind of single payer but set up this Rube Goldberg machine so as not to upset the big $$ players in the health care industry.

    (2) Americans seem to prefer being swindled/ given the runaround by for-profit Wall Street owned healthcare businesses than demanding government single payer. Americans, except for the wealthy, do not 'own' their government or demand policy common in other nations for over 60 years like national health care.

    (3) Midterms are not good for sitting Presidents.

    (4) Dem's had control of Senate (60) and House in 2009 and couldn't pass single payer, why should anyone think if they'll ever do it?

    Recent articles on lack of trust in America:

    In No One We Trust, Joseph Stiglitz, NYT, Dec. 23, 2013

    ....events — and economic research — over the past 30 years have shown not only that we cannot rely on self-interest, but also that no economy, not even a modern, market-based economy like America’s, can function well without a modicum of trust — and that unmitigated selfishness inevitably diminishes trust....It’s hard to know just how far we’ve gone down the path toward complete trust disintegration, but the evidence is not encouraging.  Economic inequality, political inequality, and an inequality-promoting legal system all mutually reinforce one another....

    Trust No One, Economist, Dec. 6, 2013

    ...mistrust of government specifically seems to be at least as widespread among the well-off. Techies and internet junkies, for example, who are generally not poor, have a tendency to skew libertarian, to think government is a slow-footed dinosaur that is either actively pernicious or simply too incompetent to contribute to welfare...


    by NCD on Mon, 12/23/2013 - 11:56am

      Single payer seems more sensible to me than Obama's effort to force the market to work the way he wants it to. Such schemes usually don't work. The traditional social welfare state isn't an attempt to control the economy, but to ease the pain the economy inflicts on us.


    by Aaron Carine on Mon, 12/23/2013 - 4:42pm

    'Ease the pain the economy inflicts on us' sums it up alright.

    Americans wanted single payer. Obama's weakness in not holding out for at least baby steps toward single payer gave us the complex labyrinth of ACA.


    by ANON.NCD (not verified) on Mon, 12/23/2013 - 6:03pm

      Since Obamacare is a Democratic project, my guess is that the public will blame the debacle on the Democrats, not the Republicans. Recent Polls have shown a decline in approval ratings for the Dems, without a corresponding decline in the Republicans' numbers--which, of course, aren't good either.


    by Aaron Carine on Mon, 12/23/2013 - 7:49am

    There was a crime committed and the republicans wanted no prints on this.

    Did they not warn the people?  

    Single payer would have protected our privacy; something the Obama administration tramples and scoffs at. 

    Give up your right to privacy and this government will give us Health care?


    by Resistance on Mon, 12/23/2013 - 6:56pm

    Would, then, the Republicans have put their prints all over single payer?

    And had single payer gone through, would they not have "warned the people" about imminent socialism just as Reagan did with Medicare back in the 1960s?

    The Republicans didn't "warn" anyone about anything. All they did was sing that old Groucho Marx song: "Whatever it is, I'm against it."


    by Peter Schwartz on Wed, 12/25/2013 - 2:41pm

    Would, then, the Republicans have put their prints all over single payer? 

    Maybe the progressives would have gotten what they wanted all along, without trying to kiss up to the obstructionists, who told us to take a hike anyway.

    WE the people could have defended against the sole Socialism criticism; now we have to defend against the Socialism charges anyway, along with the privacy issues. 


    by Resistance on Tue, 12/31/2013 - 1:50am

     There are state where it will hurt the Republicans because of the denial of Medicaid coverage.  I live in one of those states that has the highest amount of people in this group.  ACA is not the only issue in state mid terms.  Local and state issues are the focus also.  Women's health care rights, education, gun issues, Medicaid and voter rights will be in the mix.  GOP will try to nationalize the mid terms but Issues and unpopular governors will keep that from happening.  


    by trkingmomoe on Sun, 12/22/2013 - 9:24pm

    "Here they are with a front page story telling us about the tragic situation of the Chapmans, a New Hampshire couple making $100,000 a year who will have to spend $1,000 a month for insurance with Obamacare. This would come to 12 percent of their income. The piece tells readers:
    “Experts consider health insurance unaffordable once it exceeds 10 percent of annual income.”
    "That’s interesting. If we go to the Kaiser Family Foundation website we find that the average employee contribution for an employer provided family plan is $4,240. The average employer contribution is $11,240. That gives us a total of $15,470. Most economists would say that we should treat the employers payment as a cost to the worker since in general employers are no more happy to pay money to health insurance companies than to their workers. If they didn’t pay this money as health insurance then they would be paying it to their workers in wages."
    (Sorry. Don't know why this is formatting in this way.) The above is Dean Baker's quote from Kos. I would say two things about this: 1) 12% isn't that far off of 10%. And, assuming that they're getting better insurance--a point they seem to allude to--the extra 2% doesn't strike me as a bad deal.
    2) Whether the extra $11,240 would be paid to the employee, as Baker assumes and you question, is beside the point. The average worker's insurance costs $15,470 however that cost gets divvied up. Under Chapman's ACA plan, it's going to cost $12,000 for what we can only assume (perhaps incorrectly) is equivalent or better coverage. (Not all employer-provider coverage is all that good as we can see with the mini-meds offered by places like McDs.) And, as you hint, he's stuck at his job if he wants to get his illusory discount. He couldn't go out on his own (pre-ACA) if he wanted to keep his "cheap" insurance. And if the employee were to get some of this money in higher salary, then the point is even stronger, IMO.
    One other point that I haven't seen mentioned elsewhere. The whole idea behind the exchanges is that they are marketplaces where insurance companies would be competing for the individual's business against other insurance companies. Well, making these marketplaces work takes time.
    Right now, insurance companies are hedging their bets, because they have to set prices in advance (right now for 2015, I believe) without knowing who or how many people or other companies will participate in the exchanges. They haven't felt the sting of other companies stealing their customers by giving them a better deal, etc. They haven't had to sharpen their pencils to steal other companies' customers. And so on. Market places take time to get going and work well.
     

    by Anonymous PS (not verified) on Tue, 12/24/2013 - 10:27pm

    "...if you think life is rough with a six figure salary, imagine like at $40,000 a year, which is what most people live with."

    This is almost a meaningless discussion. Is $100,000 a lot or a little for someone living in Manhattan? Is it adequate or is it inadequate?

    It all depends on the life you want to lead. If you want to have a family of four and you want to send your kids to private school, then maybe it's not enough.

    But who ever said that having a family of four, sending your kids to private schools, and living in Manhattan was some kind of necessity?

    My brother lives at 90th and Columbus and makes about $40,000 and does "fine." But that's because he's made certain choices which anyone else could make if they wanted to do "fine" on the Upper West Side making $40,000.

    If you keep the choices static and drop someone's income from $100K to $40K, then they are probably going to get the bends unless, at $100K, they are living way below their means. Even so, the inability to save what they're used to saving will give them the willies, I'm sure.

    Keep the choices static and up someone's income from $40K to $100K, then they will feel like instant millionaires unless their spending habits also adjust upwards proportionately, which they may well do.

    It's true that $100K "doesn't go far" in Manhattan, but the easy cure for that is not to live in Manhattan. It's also true that 100K goes a LOT further in Manhattan than $40K goes.


    by Peter Schwartz on Wed, 12/25/2013 - 2:35pm