His statement was in regard to the “$900, on average — our families [pay] in higher premiums because of uncompensated care.” The President’s position is to regulate behavior and force everyone to either carry insurance or pay a fine.

“The — for us to say that you’ve got to take a responsibility to get health insurance is absolutely not a tax increase. What it’s saying is, is that we’re not going to have other people carrying your burdens for you anymore.“

As I wrote last week here on AIP, this assertion that we are all collectively picking up the tab for the uninsured to the tune of $900 to $1100 a year per family, is false. Unfortunately, the media has been slow to fact-check the President’s talking points on health care reform. The WSJ picked up the story about Otto Raddatz just last week when I wrote about it on AIP almost a month ago. Perhaps now that the President has repeated this fallacious claim about the uninsured a few more times, the media will cast some sunlight on the truth.

But, the President’s flawed data isn’t the only issue. It’s the sentiment he expressed in defending his plan, that we’re not going to have some people carry the burden for others. For today only, and only when it comes to this topic of the uninsured and their effect on premiums, the President positioned himself as against pinning the burden on one segment of society for the benefit of another.

But, isn’t this what his Presidency is based on? On all of us being each other’s keepers? How many times has he told reporters that successful people like him should pay more in taxes than the waitress struggling to make ends meet (an example he took a liking to on the campaign trail)?

Yet today, by the President’s logic, he expressed that when people don’t shoulder their responsibilities, when they expect for everyone else to carry them, everyone else pays the price. The collective suffers. And, this time, President Obama finds this unacceptable.

Surprised? Why the change from his normal philosophy of fairness — that is, taking from one group to pay for another because it’s the fair, socially just thing to do? What are we missing? What happened today?

The answer is that this is a good for today only, health-care specific policy he’s carved out. There is no reconciling his statement today with his belief that ‘spreading the wealth around’ is the only way to success.

Charles Krauthammer wrote an excellent article this weekend on President Obama’s shaky relationship with the truth. He writes, “Obama doesn’t lie. He merely elides, gliding from one dubious assertion to another.” When one tactic doesn’t work, he moves on to the next ploy. Krauthammer perfectly sums up Obama’s approach to his health care pitch. If you like your insurance, you can keep it — didn’t work. The public option is just an option — didn’t work. I will not sign a plan that adds a dime to the deficit — didn’t work. Illegal immigrants will not be covered under our plan — didn’t work.

So, our salesperson-in-chief moved on to his next gambit. Is it to obfuscate? To sound conservative? I’m not sure. What I do know is that President Obama’s policies embrace a philosophy that is completely opposed to the one he peddled today. But, with his health care proposals remaining unpopular, I guess he’ll try anything to sell his plan — including throwing a little conservative philosophy in there.  Many including Karl Rove and George Will have pointed out that when the President talks about health care, the poll numbers go down. This week’s numbers will tell whether this new untrustworthy sales tactic worked.

*Originally published September 20, 2009 on the American Issues Project Blog, here.

Given our President’s tendency to distort facts, I looked into the story of this Illinois man, who I found out was Mr. Otto Raddatz. And, it turned out the President’s version of what happened to Mr. Raddatz was untrue. Since then, I’ve been wondering if anyone in the media would pick up on this story, and finally, Scott Harrington did so today in the WSJ.

Below is a reposting of my original piece on the American Issues Project Blog on August 23, 2009.
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Debunking willful misrepresentations in the health care debate: the story of Otto Raddatz.

President Obama used his weekly address yesterday to “debunk[] some of the more outrageous myths circulating on the internet, on cable TV, and repeated at some town halls across this country.” If we’re clearing the air of falsehoods related to health care, then there is one story in particular that the President himself has referred to on a number of occasions that he should have corrected. That is the story of an Illinois businessman named Otto Raddatz.

At a town hall forum in New Hampshire on August 11, referring to Mr. Raddatz, President Obama said:

“Another [man] lost his coverage in the middle of chemotherapy because the insurance company discovered he had gall stones that he hadn’t known about when he applied for insurance. Now, that is wrong, and that will change when we pass health care reform. That is going to be a priority.”

A few days later at a town hall in Montana, the President repeated this story.

“One man from Illinois lost his coverage in the middle of chemotherapy because his insurer discovered he hadn’t reported gall stones he didn’t know about. True story. Because his treatment was delayed, he died. “

And on August 15, Obama penned an op-ed in the New York Times titled, “Why We Need Health Care Reform” where he repeated the story for a third time.

“A man lost his health coverage in the middle of chemotherapy because the insurance company discovered that he had gallstones, which he hadn’t known about when he applied for his policy. Because his treatment was delayed, he died.”

The story the President relates of this innocent person who played by the rules and maintained insurance only to have it fail him in his time of a need is indeed a powerful, persuasive story … except that it’s not entirely true.

Here’s the true story, based on testimony from Mr. Raddatz’s sister at a hearing before the House of Representatives’ on June 16, 2009.

Mr. Raddatz was a restaurant owner in Illinois who purchased an individual insurance policy for himself and his wife in 2003. On the original insurance application, he indicated that he had a history of kidney stones and was a smoker. A year into the policy, at the age of 59, Mr. Raddatz found himself losing weight rapidly and sought medical attention. It was then that he was diagnosed with stage four non-Hodgkins type lymphoma, a cancer of the immune system. After undergoing a series of chemotherapy and drug treatments, he was referred to a specialist for high-dose chemotherapy and a stem cell transplant.

At that time, he was informed by his insurer that his insurance was being cancelled due to his failure to disclose material information about his medical history – namely that he had a history of gall stones and an aneurysm. As it turns out, Mr. Raddatz was unaware of this diagnosis, having never been given the test results this information came from.

This happened just as Mr. Raddatz was told that he only had a 3-4 week window in which to get the stem cell transplant he needed. With his insurance rescinded, he could not afford to pay for the procedure out-of-pocket. His sister, Peggy Raddatz, reached out to the Illinois Attorney General’s office who reviewed the situation and sent two letters to the insurance company arguing that Mr. Raddatz had not lied to the insurance company since he had been unaware of the test results and had in fact, never received any treatment for either of those issues.

The insurance company reinstated his insurance policy. He went on to receive the stem cell transplant, “which was extremely successfully” and enabled him to live for three and a half more years. He passed away when, while being scheduled to have a second transplant, his donor suddenly died.

Now in President Obama’s version of the story, Mr. Raddatz died because his treatment was delayed. That is a lie. Mr. Raddatz’s story is powerful in terms of illustrating problems with the insurance industry. It is particularly relevant that he was self-insured, given the problems with the individual insurance market, the low numbers and high turnover of participants and the lack of tax benefits which make it less attractive to individuals. All of this makes the pool of participants amongst which claims can be distributed even smaller, resulting in higher costs to individuals and the insurance companies themselves.

But, that wasn’t the President’s point. He didn’t tell this story to promote reforms in the individual insurance market, to make it equitable with employer-based insurance by giving it the same tax benefits or allowing people to purchase insurance from any state they’d like. Instead, this was a story, much like the cases of tonsil-removing, foot-amputating doctors, that was meant to vilify the insurance industry and exploit people’s emotions given the tragic ending Mr. Raddatz faced at the hands of his evil insurance company under President Obama’s made-up version of the story. If, as he said this weekend, President Obama really wants to open a new chapter, “not one dominated by willful misrepresentations and outright distortions”, then perhaps he should start leading by example.

A 2008 study by the Urban Institute for the Kaiser Family Foundation looked at the 2005 study and concluded:

“[W]e are highly skeptical that the high and growing cost of private insurance is strongly related, if at all, to the amount of uncompensated care delivered by private providers or to the growing number of uninsured people.

Jack Hadley, the lead researcher on the KFF study, [told Factcheck.org] that to assume that the insured end up paying for all uncompensated care is “clearly an exaggeration.” According to KFF, the amount of uncompensated care that providers could shift to the privately insured is much less, only $8 billion, not the $42.7 billion Families USA said could be passed on to premium payers in 2008. The KFF number is less than 19 percent of Families USA’s, and by [Factcheck.org's] figuring that implies a per-family increase in health insurance premiums of less than $200 a year, not $1,000.“

As for the President’s argument that the uninsured overuse emergency rooms, a study by the University of Michigan found the exact opposite to be true. In a study published in the Journal of the American Medical Association their team concluded that:

“The uninsured do not make up a disproportionate share of ER patients, because they are the only group that faces the full cost of care…Although it challenges some of the most-repeated mantras about the uninsured and ER care, the study does confirm that solid evidence exists for many of the things that Americans have come to believe about the uninsured and emergency care.

For instance, the study shows, the number of people without insurance visiting American ERs is rising — but less quickly than the numbers of uninsured are rising. Meanwhile, patients with insurance are going to the ER more frequently.

There is also solid evidence that caring for patients — insured and uninsured — in an ER is more expensive than treating the same complaint in a doctor’s office. Uninsured people definitely have a hard time finding primary care doctors who will see them as outpatients, but even insured patients have difficulty finding primary care.

“What we found is that there is a perception that — because one of the roles of the emergency room is a safety net for the uninsured — it is the uninsured who must be causing all the problems in ER care,” says first author and emergency physician Manya Newton, M.D., MPH, M.S., a Robert Wood Johnson Clinical Scholar at the U-M Medical School.

“The crisis in emergency medicine and the problems of the growing uninsured population have been conflated,” she said. “While there’s excellent research out there on both issues, the myths about how the uninsured use the emergency department threaten to interfere with the policy-making process. The rise in ER use has much more to do with the aging of the population, the increase in chronic diseases, and the decrease in available primary care than with the uninsured. Policies based on false assumptions risk diverting energy and money from confronting the true drivers of emergency department crowding.”

At the least, Newton and her co-authors conclude from their review, ER policy solutions will need to address the lack of timely access to primary care by the uninsured and insured alike.”

So much for the uninsured monopolizing emergency rooms and increasing costs for everyone.

But, as it turns out, the President is right in pointing out that those who have private insurance do foot the bill for others who underpay. What the President got wrong is who this culprit is who underpays and leaves others having to pay the bills. Since it happens to be the government when it underpays for Medicare and Medicaid services, this is a hidden tax the President doesn’t want you to know about.

ObamaCare opponents argue that these already existing public programs add to the high cost of private insurance. More specifically, when the government imposes its own fee structure on providers, and thereby underpays them, they find ways to recoup those lost fees. And by now, you can probably guess who bears this expense — taxpaying, insured, private citizens like you and me.

A recent article by Grace-Marie Turner and Joseph Antos in the WSJ explains:

“According to Milliman, an independent actuarial firm, Medicare—and to an even greater extent, Medicaid—underpays doctors and hospitals, shifting costs to private insurers. Milliman estimates that the average family in a private PPO health plan pays an additional $1,788 a year to compensate for underpayments by Medicare and Medicaid, representing a “hidden tax” on commercial payers totaling $89 billion a year.”

Providers could not keep their doors open without the higher payments from private insurers. A recent letter to Congress from 13 leading health-care delivery organizations, including the Mayo Clinic, said “many providers suffer great financial losses associated with treating Medicare patients.” They said that if these rates were expanded to patients who currently have private insurance, the result “will be unsustainable for even the nation’s most efficient, high quality providers, eventually driving them out of the market. “That means we would say goodbye to some of the best health-care systems in the country.

Yet, as he laid out in his speech to Congress this week, President Obama’s goal is to insure everyone under a Medicare/Medicaid type system. So the critical question then becomes, who will pick up these costs if a Medicare-for-all system is implemented?

ObamaCare supporters have not answered that question. Instead, their response to critics who point out that private companies cannot compete with this government-run system is that the public option is just an option. This default response does not address the issue, and their dismissal of such an important question is one reason why they are losing the health care debate. Just last week, former Senate Majority Leader and HHS Nominee Tom Daschle mocked those who are concerned with the public option, laughing at what he sees as the illogical argument that the public option is bad because it would be so popular. Clearly, Mr. Daschle misses the point. Critics of the bill are concerned with the bill’s constraints on individuals and private businesses via mandates and on insurance companies via regulations — all of which will result in 1) increased premiums for private insurance and 2) as many as 88.1 million people being forced into the public option (see The Lewin Group’s study).

President Obama stated this week that his door is open to those with alternative proposals. The 13 health care organizations that wrote that letter to Congress actually support health care reform, just not the President’s version. If he truly cares about health care, he’d do well to start listening to them and to stop using false information, like his claim about the cost of the uninsured visiting emergency rooms, to support his program. Obama often refers to the greater good, the socially just thing to do. Well, in this case, it’s to make sure that health care providers never have to shut their doors, or else it won’t matter how many are or aren’t insured.

*Originally published September 13, 2009 on The American Issues Project Blog, here.

Not only was Durbin clueless when it came to individual mandates in the House bill (which really, by this time, you don’t even have to have read the bill to know it includes individual mandates), but he continued to spread misinformation about our current system as a way of justifying his government-centric health care goals – namely, that most bankruptcies are caused by medical problems. My stomach hurts at the idea of listening to him closely enough to transcribe where he addresses this, but here goes anyway.

“I’m glad for your experience and that you came out of it without debt, but you are an exception. When you look at the filings for personal bankruptcy in America today, 31% were for medical bills just a few years ago, that’s doubled. And, it turns out that of the 62% who are filing for personal and family bankruptcy because of medical bills, 78% have health insurance. It’s just not good health insurance, and it doesn’t cover them…a lot of people are facing bankruptcy today because they’re not in that good position. And, I’d like to take you back to one sentence you said, the government is going to force us to take an option. Listen to what you said. It’s an option. If you don’t want to choose the government plan, you don’t have to. It’s an option. You can choose private health insurance.”

I’m no math whiz, but Durbin thinks that 62% of individual bankruptcies are because of medical bills that pile up. First of all, even under his own theory, he says that close to 80% of those people have health insurance, but it just doesn’t work for them. That’s false; the controversial study he’s referencing states that nearly 2/3 of personal bankruptcies are due to uninsured medical treatment and loss of coverage. Brett Skinner of AEI’s The American analyzed the study and also compared American and Canadian rates of bankruptcy due to medical reasons, since Canada already has the type of system we’re heading toward.

“Th[is] medical bankruptcy study has been soundly refuted by several researchers. This includes critiques published by David Dranove and Michael Millenson in Health Affairs and a working paper by the American Enterprise Institute’s Aparna Mathur.

The idea that large numbers of Americans are declaring bankruptcy due to medical expenses is a myth. Dranove and Millenson critically analyzed the data from the 2005 edition of the medical bankruptcy study. They found that medical spending was a contributing factor in only 17 percent of U.S. bankruptcies. They also reviewed other research, including studies by the Department of Justice, finding that medical debts accounted for only 12 percent to 13 percent of the total debts among American bankruptcy filers who cited medical debt as one of their reasons for bankruptcy.

As for the notion that greater government involvement in health insurance will reduce bankruptcy, it is helpful to compare personal bankruptcy rates in the United States and Canada. Unlike the United States, Canada has a universal, government-run health insurance system. Following the logic of Himmelstein and colleagues, we should therefore expect to observe a lower rate of personal bankruptcy in Canada compared to the United States.

Yet the evidence shows that in the only comparable years, personal bankruptcy rates were actually higher in Canada. Personal bankruptcy filings as a percentage of the population were 0.20 percent in the United States during 2006 and 0.27 percent in 2007. In Canada, the numbers are 0.30 percent in both 2006 and 2007. The data are from government sources and defined in similar ways for both countries and cover the time period after the legal reforms to U.S. bankruptcy laws in 2005 and before the onset of the 2008 economic recession.The truth is that the majority of debt among bankrupt consumers in both Canada and the United States is comprised of non-medical expenditures and therefore has little to do with health insurance coverage.

On the rare occasion that medical debts do partially contribute to bankruptcy, they likely accumulate from patients’ demands for the kinds of expensive, cutting-edge or end-of-life treatments that would never be covered by government insurance anyway. It is a fact that many of these same types of expensive treatments are increasingly not insured by government healthcare in Canada. Survey research commissioned by the Canadian government found that despite having a government-run health system, medical reasons (including uninsured expenses), were cited as the primary cause of bankruptcy by approximately 15 percent of bankrupt Canadian seniors (55 years of age and older).

There is no objective evidence to indicate that a government-run health care system in the United States will reduce personal bankruptcies. The U.S.-Canada comparative analysis strongly suggests that bankruptcy statistics are being exaggerated and distorted for political reasons.”

The Dranove and Millenson study Skinner cites found that among the 17% whose bankruptcies appear to be linked to an inability to pay their medical bills, most have income within the poverty level. They certainly don’t have private insurance that doesn’t work for them as Durbin suggested.

And it’s no wonder Durbin didn’t want to hold any town hall forums this summer when his strongest argument was, look at the phrase you used, public option. What should he have called it? The public-no-other-option? The step 1 to single-payer public option? I mean, come on, that’s all you’ve got Senator? Your only answer is to play semantics with a man who got up and told you his personal health story of overcoming Hodgkins lymphoma, and you remind him of the label Democrats chose to place on this monstrous transformation of our health care system? Perhaps you raise a good point; perhaps those of us that are anti-ObamaCare ought to stop calling it an ‘option’ altogether since it’s been shown over and over that that term is clearly not based in reality.

Or, here’s another thought Senator. Before you start getting all clever on us with your word games, and before you have another panel discussion about health care, how about you sit down and at the very least, even if you don’t read the House bill since I guess that would be beneath you as a Senator (and you wouldn’t have time for that given all that you’ve been…hey, what exactly have you been working on all summer? This constituent would like to know, but I digress…), why don’t you at least do some research and inform yourself as to what the issues are before you start accusing others of ‘misrepresenting the issues’, ‘sucker-punching their opponents’ and ‘engaging in political theater’?