CEPR - Center for Economic and Policy Research

Multimedia

En Español

Em Português

Other Languages

Home Publications Blogs Beat the Press NYT Puts an Anti-Obamacare Piece in the News Section

NYT Puts an Anti-Obamacare Piece in the News Section

Print
Wednesday, 28 March 2012 04:43

It's always good to get the perspective of the people on the ground when reporting on a policy. However, when they say things that are clearly not true, reporters should provide readers with the correct information. The NYT fell down on the job in a piece that presented the views of a number of people in Massachusetts who were unhappy with the mandate and employer penalties in its health care law, which is the model for Obamacare.

The piece begins by telling us about Wayde Lodor, a 53 year-old independent product development consultant from Leominster. Mr. Lodor says that he is in good health and therefore does not want to buy insurance for himself and his college age daughter. The article tells us that Lodor estimates the cost of this insurance at $1,200 a month.

A quick visit to the Massachusetts insurance exchange reveals that the lowest cost plan for a 53-year old with one dependent child would be $685. This is only a bit more than half of Mr. Lodor's estimate of what he would have to pay to comply with the mandate. It would have been helpful to tell readers that Lodor had seriously over-estimated the cost of complying with the mandate.

The piece then talks to Teofilo Cuevas, who it tells us earns about $40,000 a year as a meat cutter at a grocery store. Mr Cuevas has apparently dropped his employer provided insurance because he could not afford the co-payments. It would have been useful to note that Mr. Cuevas' income would qualify him for subsidies under the Massachusetts plan. He would not be required to pay more than $235 a month. That may still be a serious burden, but it would have been useful to provide this information.

The next source is a small business owner, Ronn Garry Jr., owner of Tropical Foods, a grocery store in the Roxbury section of Boston. Mr Garry complained that the $295 per worker penalty for firms cost him nearly $30,000 a year. Actually, 70*$295 = $20,650. This would usually be thought of as close to $20,000, rather than nearly $30,000.

The piece also relies on Garry's claim that he faces this fine only because not enough workers signed up for his employer provided plan. It is possible that Garry provides little subsidy with this plan so that it is unaffordable for most of his workers.

Finally, the piece turns to William Fields, who is described as "a consultant in Boston who helps employers comply with the law." Mr. Fields is quoted saying:

"You have some of those who are truly bad guys and should be fined,. ... But the ones that are personal to me are the $50,000 fine that puts my client out of business.”

Fields does not give any examples of businesses that were closed because of this fine. It would have been worth pressing him on the topic because it is not clear what he thinks he is saying.

Any business that goes under is by definition marginal. This means that any expense can be seen as putting it under. This could mean its electric bill, a dry-cleaning bill, or any other item. To owe a $50,000 fine the business would need to have 170 employees. A firm with 170 employees would typically have sales of at least $5 million a year. The odds are that if a $50,000 penalty caused such a firm to close, it probably would have gone out of business in any case. In other words, this firm was on its way down and paying the fine really did not affect its fate.

It would have been helpful to readers if this article had made an effort to determine the accuracy of the assertions these people were making rather than just reporting them unquestioningly. 

Comments (12)Add Comment
The Massachusetts Mandate
written by Pat From Massachusetts, March 28, 2012 6:29
Thank you for this article from the New York Times. As of April 1, 2012 the New York Times will reduce my "free reads" from 20 to 10 per month OR ELSE I WILL HAVE TO PAY PAY PAY which of course I will not do since I can come here and read the lies I am missing!

Thank you again for reaffirming for me that the New York Times is not worth the lousy 99 cents per month they want me to shell out.

So, let's see, Krugman op-eds per month equal 8. That leaves me two left over. Decisions. Decisions.

nytimes limit
written by Tom, March 28, 2012 7:01
If you don't like the paywall, try undecorating the url...
...
written by DLS, March 28, 2012 8:29
I think that Mr. Cuevas is likely not referring to the premium, which would be subsidized, but rather to the cost of copayments and deductibles, which are not. These latter costs can be quite considerable.
...
written by JMW, March 28, 2012 8:57
The cost of insurance for the self-employed is lower than the premium if they are be able to deduct the cost for federal taxable purposes--and in most cases they can; in fact, it could be as much as 35% lower than the $685 in the first example.
Ms
written by Mary, March 28, 2012 9:03
It's always wise to look at both sides of an argument and to check facts. That aside, as someone whose Medicare/private insurance costs over $200/mo, I would have to give up something important if that cost were to rise. I feel empathy for those who will not be able to afford a decent level of insurance. Maybe I should say I feel fear. I'd rather see single payer for those under a certain income level.
Mr. Cuevas
written by KeithOK, March 28, 2012 10:44
I agree with DLS that the comment by Mr.
Cuevas seems to be about co-Payments, but I'm not sure what Mr. Cuevas is getting at. The medical deductible without insurance is $0 and the co-Payment without insurance is 100%, on top of the fact that you pay the "rack rate" for medical services rather than the negotiated rate the insurance company obtains. If he can't afford the insurance, it seems to be an income problem rather than a problem with the insurance itself. He can't afford to get sick at his income level, without bigger subsidies.
...
written by PeonInChief, March 28, 2012 11:29
The stupidities of the people opposed to the mandate have almost turned me in favor of it (although I'm a single payer girl). But the cost of compliance may be difficult for moderate-income households in high-cost states (like Massachusetts), where housing costs eat up a lot of income.

And a firm with 170 employees should be able to get a pretty good health plan; the problem is for employers with fewer than 50 employees, and for ones with fewer than 20, deadly.
Markups
written by David, March 28, 2012 1:44
Mr. Garry runs a grocery store, he is probably accustomed to making 50% markups on whatever he pays. That is how $20,000 turns into $30,000? In any event, a 50% error is not an error, it's a lie. The reporter was not earning their salary checking on that claim. "Mr Garry feels that he pays $30k, but in actuality it's $20k." What he doesn't get is that he is making the rest of us pay far more for his employees remaining uninsured.
...
written by David, March 28, 2012 5:38
The NYT has pretty much given up all pretense of objectivity. They ran this article http://www.nytimes.com/2012/03...oop&st=cse the other day about the Brooklyn Coop that was voting on a potential boycott of Israel without citing a single supporter of the boycott. They also let slide comments like Bloomberg's,
“The issue is there are people who want Israel to be torn apart and everybody to be massacred, and America is not going to let that happen.”
. Really, Mike?
Mass. health insurance for self-employed
written by Steve, March 28, 2012 5:46
I agree with your criticism generally. As for Mr. Lodor, in his situation the health insurance options - as one can discover from viewing the site link you posted - range from the low $685 option you mention up to more than $1300 for traditional type health insurance. Perhaps that was what he was talking about. The cheap $685 policy you mention may indeed be right for him if he and his daughter are both healthy and never need any care. That is because it is a high deductible policy, with a $4000 annual family deductible that must be paid first; there are also $25 copays for each doctor visit, $100 copays for each ER visit (other services have high copays as well) and 20 percent coinsurance for hospitalization. That $4000 alone amounts to $333 per month over a year. If he and/or his daughter need any real medical care that costs real money, then he will spend close to $1100 plus on average per month: $685/mo premiums and $333 additional for payment of the upfront deductible costs per month. If they are truly healthy, he could instead put that $333/month into a health savings account, and let it accumulate until he/they may later need it (in a later year)...The mandate is not the worst thing to happen, but it is a mandate forcing self-employed to pay dearly for health insurance that does not always provide that much, at the low end. For traditional kind of health insurance that truly covers everything with low copays, coinsurance and deductibles, Mr. Lodor would indeed need to pay more than $1300 in fact.
...
written by Steve, March 28, 2012 6:06
By the way, single payer is the only way to go, in my opinion. And with that - a long-needed expansion of Medicare to cover all - maybe we can finally bring the crazy costs down, so we're no longer paying twice what Europeans and Canadians are for the same medical care. And no longer paying these unnecessary middlemen as well.
Do hospitals load up on charges when people don't pay??
written by jumpinjezebel, March 28, 2012 10:56
Anyone ever do any research into the theory that hospitals when they find out (or maybe even expect) that someone will not pay the bill that they load it up with everything they can at the maximum rates so the inflated bill will go into the hospitals loss budget so they can charge everyone else more to make up for their "deficits"??? I bet they do.

Write comment

(Only one link allowed per comment)

This content has been locked. You can no longer post any comments.

busy
 

CEPR.net
Support this blog, donate
Combined Federal Campaign #79613

About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

Archives