Category Archives: Election 2012

Is it Possible to Insure Everyone in a For-Profit Health Insurance Market?

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By Bikna Huang

Over the past two days, we have been examining the Affordable Care Act in light of the impending Supreme Court decision on the individual mandate provision.  Overall, the issue at hand is how to maintain a for-profit private health insurance system while requiring insurers to essentially return to the community rating system that they had basically abandoned by the 1960s. Earlier this month, President Obama stressed that there were only two ways to fix the health care system, by implementing the individual mandate or a single payer system. The single payer system would be another solution presented by President Obama and the Democrats.

“One way is a single payer plan. Everybody is under a single system like Medicare. The other way is to set up the system in which you don’t have people who are healthy but don’t bother to get health insurance and then we all have to pay for them in the emergency room. That doesn’t work, and so as a consequence we’ve got to make sure that those folks are taking the responsibility seriously – which is what the individual mandate does.” – President Obama

Another solution is Representative Paul Ryan’s plan.  Ryan’s proposal, transforms Medicare and creates a premium support plan. This plan will essentially give premium support for senior citizens to choose from varies providers for their Medicare coverage. The goal of this plan is to reform the Medicare system and “to create—a market so robust we can finally begin to control costs.” Under Ryan’s plan, those who do not purchase health insurance will not be penalized.

We have looked at different aspects of Obamacare through this series, focusing primarily on the individual manadate.  However, in the broader context, the fate of the individual mandate is simply one piece of a problem that needs to be addressed. The United States is ranked as one of the top nations in the world in terms of its GDP and standards of living; however, this is surprising when the health care system in the United States is ranked thirty-seven. When President Obama took office in 2008, the prospect of health care reform seemed closer than ever and the compromise plan that emerged, the Affordable Care Act, seemed like the solution. But in order to maintain the private system, the individual mandate, proposed in the 1980s by the Heritage Foundation seemed to be the most practical way.  There is much to be known about the Affordable Care Act, and the constitutionality of the act is still being decided. What do you think about the individual mandate? Will Obamacare be a push in the right direction for health care reform?

Bikna Huang is an intern with TheFactFile.com who studies at CalPoly in San Luis Obispo, California.

Could the Affordable Care Act survive if the individual mandate Were Eliminated?

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By Bikna Huang

In March 2012, the United States Supreme Court heard oral arguments about the Affordable Care Act, popularly known as “Obamacare.”  Most of the argument was about the individual mandate provision,  which bothered the states who had brought the original individual law suits that were heard together before the Supreme Court.  Once fully implemented in 2014, the individual mandate requires the 50 million uninsured Americans to obtain health insurance.

The idea behind the mandate is to bring costs down for everyone by bringing generally younger and healthier Americans who would not normally buy health insurance into the market which has the effect of spreading the costs for expensive care over a larger population and thereby reduces the average costs for everyone and thereby lowers premiums.  A secondary argument is that it keeps the uninsured out of emergency rooms which is generally where the uninsured get their care.  The reason this is important is that emergency room treatment is extremely expensive compared to normal medical care.  Thus, the mandate was added as a method to require Americans who are generally healthy to buy insurance they would not otherwise buy. There are some studies to support the notion that the mandate is important to cost containment.  For example, a study published in the journal Health Affairs noted:

“We estimate that if the mandate were lifted, premiums in the individual market would increase by 12.6 percent—somewhat less than other estimates—with 7.8 million people losing coverage, versus other estimates for coverage loss of 16–24 million people. In sum, the Affordable Care Act would still cover 23 million people who would have been uninsured without the law.”

While cost containment is the reason for the inclusion of the individual mandate, we wondered whether The Affordable Care act could survive if the Supreme Court strikes down that provision.  That is, without the individual mandate, is Obamacare still Obamacare?  There are a number of possibilities, however, removing the individual mandate would remove the central feature of the plan—premium cost containment.  If the Supreme Court strikes down the individual mandate, Congress can either  fix or abandon the bill by transforming the mandate into a tax (or tax rebate) that is clearly within Congressional power. The Court could also simply order that the references to the individual mandate be stricken, that would leave the rest of the act in place.  In that case, the most popular provisions of the ACA would remain, people with pre-existing conditions would have guaranteed insurability, low income people would receive subsidies for health insurance. Of course, the individual mandate itself is a way to provide revenue for the insurance companies in exchange for insuring everyone without regard to risk (pre-existing conditions) so in the most dismal outcome, striking the individual mandate could lead insurance companies to bankruptcy.

Bikna Huang is an intern with TheFactFile.com who studies at CalPoly in San Luis Obispo, California.

Mandates, Cost Curves and Obamacare

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by Bikna Huang

In March 2012, the United States Supreme Court heard oral arguments about the Affordable Care Act, popularly known as “Obamacare.”  The argument centered on the individual mandate provision, which (once implemented in 2014) would require every person to be covered by some sort of health insurance. The question for the Supreme Court to decide is whether Congress has the power to require millions of uninsured Americans to get health insurance.

According to many proponents of the law, including the Obama administration, Congress has the power to require the individual mandate under the Commerce Clause because the uninsured will still use health services which would have an impact on commerce. Opponents, however, argue that the individual mandate falls under the “general police powers,” which is only for states.

The government has argued that the individual mandate will reduce costs and lower premiums, which had been increasing at rates outpacing inflation for several years, because health insurance companies usually raise premium prices to cover unpaid expenses. However, many have argued that the individual mandate will increase premiums and the cost of health insurance. Jonathan Gruber, MIT economists, predicts that Obamacare would reduce costs for the young and the old and increase for adults in between.

Paul Clement, arguing in opposition to the individual mandate, stated that the individual mandate will cause insurance premiums to “skyrocket.”  The argument proceeds that the proof is there, we have already seen increases in health insurance premiums since passage of the Affordable Care.  However, as we noted, the individual mandate is still two years away, as it will not become effective until the law is fully implemented in 2014.  Confronted with that fact, opponents argue that health insurance will increase even more then, which is at odds with a central goal of Obamacare, providing affordable health insurance.  Of course, if the Obama Administration is correct and the Affordable Care Act’s requirement for health insurance brings in a younger healthier pool who currently forgoes insurance because they are younger and healthier and thus have less need for medical care, then premiums will decrease.  It will be interesting to see whether the individual mandate stands, and which side is correct about the cost, if it does.  We at TheFactFile.com will be watching.

Bikna Huang is an intern with TheFactFile.com who studies at CalPoly in San Luis Obispo, California.

Campaign Spending in Election 2012: Cost Per Delegate, April 6 Update

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In a primary season full of twists and turns, this week brought us back once again to the era of inevitably for Mitt Romney, with a sweep of the Wisconsin, Maryland, and Washington DC primaries. As our frequent readers know, we’ve been extremely interested in the question of how money has been influencing the race, and the specific question of how much each candidate (and the Super PACs that support them) has spent per delegate earned.

Since we started following the data on the amount of money spent per delegate by each of the candidates, the trend has been pretty steady: Ron Paul gets the least bang for his buck (as of our last update on March 22, Paul spent $730,000 for each of his delegates) while Rick Santorum spent only $70,722 per delegate. So how do things stack up after Romney’s big wins this week?

The following charts compare the four GOP candidates on the total amount of money raised/spent (accesed 4/6/12). These figures include revenues/expenditures by the campaigns and the Super PACs that support them. The delegate count comes from here.

Candidate Money Raised Money Spent Delegates Overall Cost per Delegate
Newt Gingrich $39,900,000 $35,900,000 135 $265,926
Ron Paul $38,300,000 $36,500,000 51 $715,686
Mitt Romney $118,600,000 $100,800,000 658 $153,191
Rick Santorum $21,600,000 $18,600,000 281 $66,192

 


The results are remarkably similar to a few weeks back, with things getting slightly better for Paul (he now spend only $715,686 per delegate, a drop of around $14,000), Romney ($153,191, for a drop of around $26,000), and Santorum ($66,192, for a drop of around $4,000). The number for Gingrich remain the same due to lack of updated data since our last post.

We’ll continue monitoring this race for #1, and, as always, we’re interested in what you have to say: Join the discussion below or let us know via Facebook or Twitter.

Campaign Spending in Election 2012: Cost Per Delegate, March 22 Update

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The results of the Illinois Republican primary are in and, once again, Mitt Romney has reclaimed his on-again off-again place as the “overwhelming, indisputable and probably uncatchable favorite.” While we won’t dip our toes into the question of Romney’s inevitability—based on the ups and downs of the race so far, we wouldn’t be surprised if Romney’s momentum waned once again—we have been interested in the question of how money has been influencing the race. Specifically: how much has each active candidate spent per delegate earned?

Since we started following the data on the amount of money spent per delegate by each of the candidates, the trend has been pretty steady: Ron Paul gets the least bang for his buck (as of March 14, he spent $683,333 per delegate) while Rick Santorum gets by far the most from his relatively meager resources ($30,279 per delegate). But how do things stack up following Romney’s win in Illinois?

The following charts compare the four GOP candidates on the total amount of money raised/spent (accessed 3/22/12). These figures include revenues/expenditures by the campaigns and the Super PACs that support them. The delegate count comes from here (accessed 3/22/12).

Candidate Money Raised Money Spent Delegates Overall Cost per Delegate
Newt Gingrich $39,900,000 $35,900,000 135 $265,926
Ron Paul $38,300,000 $36,500,000 50 $730,000
Mitt Romney $118,600,000 $100,800,000 563 $179,041
Rick Santorum $21,600,000 $18,600,000 263 $70,722


As with our past updates, Ron Paul once again dominates all of the candidates for spending the most while getting the least, with each of his 50 delegates costing around $730,000. At the other extreme, Santorum is still getting the most out of his money, spending only $70,722 for each of his 263 delegates. However, it should be noted that this is more than double where Santorum was at one week ago, when he was at $30,279 per candidate.

We’ll continue monitoring this race for #1, and, as always, we’re interested in what you have to say: Join the discussion below or let us know via Facebook or Twitter.

Fact Checking the Fact Checkers Redux:  The Case of A singular Woman vs. The Road We’ve Traveled

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The recent release of the Tom Hanks-narrated documentary about President Obama, “The Road We’ve Traveled,” has led to a reopening of the controversy that began with the publication of “A Singular Woman”—Janny Scott’s biography of President Obama’s mother, Stanley Anne Dunham.  At issue is whether President Obama’s recollection of the last year of his mother’s life or Ms. Scott’s account is correct.

In President Obama’s recollection, his mother “died of cancer while fighting with her insurance company at the end of her life.” In contrast, Ms. Scott writes that the dispute was not with a health insurer, but rather with Cigna over disability insurance.   The Washington Post’s Fact Checker accepted Ms. Scott’s account without question and gave President Obama and the documentary “Three Pinocchios.”  This is not something we would have done at TheFactFile.com, especially given some of what we have read about Ms. Scott’s other reporting and given that even in Ms. Scott’s account, Ms. Dunham was indeed “fighting with her insurance company at the end of her life.”
Nevertheless, the context in the documentary itself seems to indicate that Ms. Dunham was battling with a health insurer.  In an effort to shed some light on the issue, we decided to do the research and digging that The Washington Post did not do in their fact checking.  We reviewed the statements on both sides of the issue made last summer when the book was first published.  (For a sample check here and here.) We also reviewed the book itself.  The most troubling aspect we noted was a lack of the source for the letters Ms. Scott quotes.  In a variety of interviews both recorded and in print, Ms. Scott has had various responses about the source of the letters she relied upon.  We found these conflicting accounts confusing and tried, unsuccessfully we might add, finding the source, or a more accurate statement on the source of the letters.  We also tried to contact Ms. Scott, and like others, were unsuccessful.   Ms. Scott’s employer, The New York Times, stated that she had not returned to work.  Finally, we contacted her publisher, Penguin, which failed to respond, although we waited more than 72 hours before going to press  with this post.
Overall, we at TheFactFile.com take the approach that when dealing with facts, some due diligence is required.  We cannot see where there are clear facts to support the conclusion that either President Obama and “The Road We’ve Traveled” or Ms. Scott and A Singular Woman deserve any Pinnochios.  All we know is that the person who lived through the last year of Ms. Dunham’s life with her, President Obama, has a different recollection than the person who wrote a story about it.
 
 

The Ideal 2012 Presidential Candidate

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With all of the hyper-partisanship of the primaries weighing us down, we decided to daydream a little today and look at where the ideal 2012 presidential candidate would stand on economic and social issues. To figure that out, we relied on recent Gallup survey data (July 2011 to the present) and our understanding of the median voter theorem.

In short, the median voter theorem—probably best explained in the political sense in Anthony Downs’ An Economic Theory of Democracy
–states that in a two party system like the United States, the competition is for the voter whose opinions are at the median. The candidate who gets the closest to that point without alienating his or her base will win the election.

Below, we took several pertinent economic and social issues that Gallup has polled on since July 2011 (the issue text links to the Gallup survey) to create our ideal median voter candidate. We used a 51% rule to construct our ideal; that is, the ideal median voter candidate will support (or oppose) an issue when at least 51% of those surveyed also support (or oppose) that issue.

So what does the median voter look like? Let’s take a look:

Issue

The Median Voter Candidate
Abortion Favors laws requiring information about abortion risks, parental consent for women under 18, a 24 hour waiting period, a ban on partial birth abortions and strongly opposes a law prohibiting abortion clinics from receiving federal funds.
Death Penalty Favors increased usage of the death penalty for murder.
Cutting the Federal Deficit Favors cutting the deficit mostly with spending cuts but is open to some tax increases (see below).
Taxes Favors increasing taxes on corporations and on individuals with incomes above $200,000 and families with incomes above $200,000.

In an upcoming article we’ll look at how our current crop of candidates compare with this theoretical Median Voter Candidate. But until then: what do you think? Join the discussion below or let us know via Facebook or Twitter.

Blast(s) from the Past: The Fact File and the Primary Concerns of American Investors

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In a post published on Gallup.com earlier this week, Dennis Jacobe (Chief Economist at Gallup) discussed the most recent findings from the Wells Fargo/Gallup Investor and Retirement Optimism Index survey; a survey conducted quarterly among investors to get a gauge of the political and economic “situations” of most concern to investors. The survey asks investors about a series of possible situations in the U.S. and whether they are helping or hurting the investment climate in the United States, using a scale that ranges from “hurting a lot” to “helping a lot.” (The survey points were September 2011 and February 2012 and the full report can be viewed here).

Given that we have looked at many of these same issues in the past few months, we thought it would benefit our newer readers to link to these analyses (as they have the tendency of getting lost in the mix). Below are some of the key results from the Gallop survey, along with these links to our reporting on each issue. Generally, you will notice that issues we have identified as serious have remained of high concern with investors, while those issues we have generally viewed as creations of media hype have diminished.

Percent of respondents in the Wells Fargo/Gallup Investor and Retirement Optimism Index survey who said that the issue was hurting he investment climate a lot, with links to our reporting

September 2011

February 2012
A politically divided federal government

74%

73%
The unemployment rate

83%

62%
Price of energy, including gas and oil

62%

53%
European debt crisis

48%

48%
Are there issues that we’ve missed that you want us to look at? If so, let us know in below in the comments or by sending us a message directly.

It’s Not Obama’s Fault That Crude Oil Prices Have Increased

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by Peter Van Doren and Jerry Taylor

Editors Note:   TheFactFile.com was in the midst of researching for a possible post on U.S. Oil Production when we came across the following piece by  Peter Van Doren and Jerry Taylor that captures the facts and the arguments perfectly.  Rather than re-inventing the wheel, we asked for permission to repost the following and the authors graciously agreed.  The original appeared in U.S. News and World Report (available here) and was also posted by the Cato Institute (available here).

Peter Van Doren and Jerry Taylor are senior fellows at the Cato Institute.

Added to cato.org on March 2, 2012

This article appeared in U.S. News & World Report on March 2, 2012.

Is President Obama responsible for spiraling price of gasoline? Republicans say yes, but the facts say no.

Why have gasoline prices increased since the start of the year? The simplest explanation is that the price of crude oil has increased. Specifically, the spot price for Brent (North Sea) crude has increased $16 a barrel since January. Given that there are 42 gallons to a barrel, that works out to a 38 cent increase in the price of a gallon of oil. Spot prices for gasoline trade in New York have increased about 41 cents per gallon over the same time frame. So there you go.

Why is the price of North Sea oil relevant to the price of gasoline in the United States? Well, we import gasoline refined in Europe from North Sea crude. Even though these imports constitute less than 10 percent of U.S. gasoline consumption, they are necessary to satisfy domestic demand and their price sets the market price for all gasoline regardless of whether other cheaper crude sources are used to refine most of our gasoline.

Why is the price of North Sea crude rising? One possibility is that supply is down. North Sea (British) production has been decreasing for some time. During the first quarter of 2007, it was 1.7 million barrels a day, or mbd. By the end of 2011, it was down to 1.1 mbd. Norwegian crude oil production has likewise decreased from 2.7 mbd in the first quarter of 2007 to 2.1 mbd at the end of 2011. And global demand is bidding up the price of crude oil from the North Sea and elsewhere.

Ironically, during the same time period, U.S. crude oil production has marched upward for the first time since 1971. Since the start of 2007, U.S. production has increased by 2.1 mbd. Sure, more domestic oil creates the possibility of fewer refined imports tied to the price of Brent crude, but given that the price of Brent sets the price for crude generally, the result would be more profit for domestic crude producers rather than significantly lower gasoline prices for Americans (not that there’s anything wrong with that).

So despite the popular perception of President Obama as anti-oil, domestic oil production is increasing for the first time since the Johnson administration. Alas, little of this has to do with the president. Prices increased from $22 in 2002 to just under $100 a barrel average in 2008 and supply has responded. President Obama is no more responsible for production increases than other presidents were responsible for production declines. Unfortunately, presidents get blamed for world market changes that occur during their time in office… but generally, they do not cause them.

Peter Van Doren and Jerry Taylor are senior fellows at the Cato Institute.

(See some related TheFactFile.com charts here)

Spending in the 2012 Elections: Who is getting the Most Value for Their Campaign Dollars? – March 7 Update

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With Super Tuesday now behind us, we wanted to return once again to the question of how much each active candidate has spent per delegate earned. As of our last update, Ron Paul was still dominating as the candidate getting the least number of delegates per dollar spent, paying around $1.8 million per delegate compared to the runner-up Gingrich’s $941,000. But have things changed after Tuesday’s primaries?

The following chart compares the four GOP candidates on the total amount of money raised/spent as of February 31, 2012. (Unfortunately, newer numbers are not available at this time). These figures include revenues/expenditures by the campaigns and the Super PACs that support the campaigns. The delegate count comes from here (accessed 3/7/12).

Candidate Money Raised Money Spent Delegates Overall Cost per Delegate
Newt Gingrich $31,500,000 $27,300,000 105 $260,000
Ron Paul $34,700,000 $32,800,000 47 $697,872
Mitt Romney $100,400,000 $63,900,000 415 $153,976
Rick Santorum $9,700,000 $7,600,000 176 $43,182

The bad news for the Paul campaign is that their candidate is still at the top of the list in terms of spending the most and getting the least. The good news, however, is that things are getting better: on February 1, each delegate cost Paul around $3 million, compared to ‘only’ $697,823 today. And once again, the Santorum campaign — at $43,182 per delegate — is gaining the most amount of delegates for the least amount of money.

We’ll continue monitoring this race for #1, and, as always, we’re interested in what you have to say: Join the discussion below or let us know via Facebook or Twitter.