The Issue

      Politicians, including Democratic presidential candidate Sen. Barack Obama, Ill., and the media have illustrated a “need” for government-run health care by citing Census Bureau statistics suggesting that in 2006 some 47 million Americans were uninsured. The Bureau in August 2008 revised the number to 45.7 million uninsured during 2007.

      Since the beginning of 2008 alone, the broadcast networks have cited the statistic at least 18 times.

      The problem: the number is inflated. It includes people who aren’t American citizens, people who could afford their own insurance, and people who already qualify for existing government coverage but haven’t taken it.

      Nonetheless, citing the Census Bureau number, Obama proposes a new government-run insurance program. Obama’s plan would “reform the private insurance market” by establishing a federal entity to oversee standards and practices for the industry.

     Obama’s plan, which includes provisions for a national coverage plan and more government regulation of the private sector, could cost as much as $452 billion annually, according to the Health Systems Innovations Network. Other sources estimate lower costs, such as the $110 billion a year estimate provided by The Washington Post.

     Obama proposes creating a new national health plan that would cover the self-employed and small businesses. His plan would prevent insurance providers from denying coverage based on pre-existing conditions. It would expand federal subsidies for families who currently make too much money to qualify for Medicaid or the State Children’s Health Insurance Program.

     Obama proposes a “National Health Insurance Exchange” to “act as a watchdog group and help reform the private insurance market by creating rules and standards for participating insurance plans to ensure fairness and to make individual coverage more affordable and accessible.”

     The plan would punish businesses who do not offer a “meaningful contribution” to their employees’ health coverage by making them pay a tax, which he has not yet specified. It would mandate health insurance for children.

     The Obama plan would also create a form of government-funded backstop insurance. The program would pay for “catastrophic” medical situations that insurance-holders and their employers couldn’t pay for.

The Media Position

     The media have largely supported the liberal approach of creating more government oversight of and involvement in the health care industry without examining the real costs of more government control. In almost 500 stories mentioning Obama and health care between Jan. 1 and Sept. 30, fewer than 20 percent mentioned “cost.”

     NBC’s Mike Taibbi said on the Sept. 12 “Nightly News” that Obama proposes “expanded health care” but didn’t explain how Obama plans to offer it.

     In an interview with Obama on the Sept. 23 “Today” show, NBC host Matt Lauer called Obama’s plan “ambitious.” Rather than questioning the candidate on his plan, Lauer simply said, “You want to improve health care, you want to improve education, the infrastructure.”

     And not all of the stories mentioning cost offered specifics on how much money Obama’s plan would actually require. ABC’s Ron Claiborne noted on “World News Sunday” April 27 that Obama and his then-rival, Democratic Sen. Hillary Clinton, N.Y., “want every American to have health insurance and they would spend billions to do it.”

     While networks have favored a government-run plan by failing to explore its consequences, at least some print media outlets have acknowledged the potential damage such a system would create. In an August 25 special section, editors of The Wall Street Journal wrote that the “likely result” of Obama’s plan would be “more Americans buying insurance with the help of government, with more people insured, but government spending a lot for subsidies.”

$452 Billion Annually

     The National Taxpayers Union Foundation estimates Obama’s plan will cost $102 billion annually, based on campaign estimates.

     An April 2008 Washington Post editorial estimated Obama’s would cost closer to $110 billion per year and accused the candidate of “aggressively overestimating [his plan’s] expected health-care savings.”

     Health Systems Innovations Network, an industry data analysis consultant, estimates Obama’s proposal will cost $452 billion annually.

     The Heritage Foundation reported in October that the exact costs of Obama’s plans are “unclear.” The report says Obama would create a “powerful regulatory agency” in the National Health Insurance Exchange, “not simply a clearinghouse for a national health insurance market. Under the Obama plan, the federal government would both set the highly prescriptive rules and compete in the market.”

     “Perhaps of greater concern,” the report said, “these expansions [of existing and new federal programs] could serve as first steps in a more ambitious federal takeover of American health care.”

     George Mason University economics professor Donald Boudreaux, a Business & Media Institute adviser, criticized plans that involve central direction.

     “Virtually every health care plan that I’m aware of involves – for my tastes, in my professional opinion – involves way too much central direction mandating how people should be covered and involvement in the medical care industry that I worry it’ll just make things worse,” he said. “I would get government out of the health care industry.”

     Grace-Marie Turner, president of the free-market health care research organization the Galen Institute, predicted that rather than keeping private options available to consumers, the combination of Obama’s national plan for the uninsured and the regulatory body created in his National Health Insurance Exchange would run private insurers out of business.

     “[O]ne of the provisions of that would be a new national health plan which is really a government-run insurance plan, if there could be such a thing, that I believe really seriously threatens the rest of private coverage,” said Turner, a Business & Media Institute adviser. “That he would say that you can buy into this government plan – which is certainly going to be subsidized by the taxpayer either directly or indirectly – it’s going to have federal policing authority, federal price control authority, all of the anti-competitive features that a government program has and it’s going to be very difficult, I think, for private plans to compete with that.”

     “I think you would quickly see that private health insurance options dry up, go away and you really only have the option of this government plan, which then is going to have a lot more authority to institute price controls and rationing and the other kind of restrictions on access to health care that we unfortunately see in many other states around the globe, many other countries,” Turner said.

     She pointed to examples of government-backed care that doesn’t provide fantastic service to taxpayers. “We’ve seen in Massachusetts, for example, that even though they passed a universal coverage bill and have a mandate that everyone has to have health insurance, they’re increasingly finding that people can’t find a doctor that can see them. There is already, I saw some statistics recently, a 100-day wait for people to actually see a primary care physician.”

     But Dan Mitchell, a senior fellow at the Cato Institute, said the current system is bad enough that Obama’s proposals wouldn’t make it much worse.

     “Obama basically is going to take that bad system and just layer a little bit more government on top of it,” Mitchell told BMI. “So it’s not as if he has a really radical plan like Hillary Clinton back in 1993, but he’s nonetheless still going to try to move government policy in the wrong direction by exacerbating the third-party problem by having more government subsidies and more government intervention.”

     Both campaigns have cited the Census Bureau statistics on the number of Americans without health insurance. While the candidates’ plans – and economists’ opinions of those plans – differ greatly, one thing is clear: the statistics about the uninsured in the United States are inflated.

      The Business & Media Institute reported in 2007 that the number included illegal aliens, people who were between jobs (rather than permanently unemployed and uninsured) and others who could afford insurance but chose not to purchase it.

     Turner called it “ridiculous and not true” to think that there is a “permanent underclass of the same 40-some million people that not only don’t have health insurance but have no access to the health care system whatsoever.”

      “At least 40 percent, probably more, are flowing through the employment-based system,” Turner said. “Because we tie health insurance so closely to the workplace in this country, many of the people have lost health insurance because they’ve lost or changed their jobs and they haven’t yet picked up coverage at their new employer, so they’re temporarily uninsured.”

     “Another probably 10 million are illegal immigrants who are not going to be addressed if we have a nationalization of our health sector,” she said. “At least 10 million of them are eligible for existing public programs, either Medicaid or the State Children’s Health Insurance Program, primarily. People who are eligible for existing programs and who are not enrolled. And another, as many as 10 million, are making $50,000 to $75,000 a year or more and could likely afford to purchase insurance.”

     Turner estimated between 5 million and 10 million Americans actually face serious problems related to lack of insurance. “That seems to me a problem we should target rather than saying we need to reorganize the entire health sector, affecting 300 million people in this country, in order to address this problem that is going to need a targeted solution anyway.”

McCain: Read about the media’s attacks on free-market approaches to health care reform.

Back to the Top