The Group of Six Senators Are Opposed to a Public Health Plan Because...
8/5/09 10:31 PM
Grasping Reality with Both Hands The Semi-Daily Journal of Economist Brad DeLong: A Fair, Balanced, Reality-Based, and More than Two-Handed Look at the World J. Bradford DeLong, Department of Economics, U.C. Berkeley #3880, Berkeley, CA 94720-3880; 925 708 0467; delong@econ.berkeley.edu.
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The Group of Six Senators Are Opposed to a Public Health Plan Because... Arindrajit Dube does the math in The Value of (Not Having) the Public Plan at The Baseline Scenario: Investors in Cigna, United Healthcare Group, and Aetna alone appear to believe that if they can block the public plan, then their investments in those three companies alone will be worth an extra $30 billion dollars.
http://delong.typepad.com/sdj/2009/08/the-group-of-six-senators-are-opposed-to-a-public-health-plan-because.html
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The Group of Six Senators Are Opposed to a Public Health Plan Because...
8/5/09 10:31 PM
Arindrajit's calculation is simple. The Senate Group of Six's (Michael B. Enzi, Charles E. Grassley, Olympia Snowe, Kent Conrad, Max Baucus, and Jeff Bingamen) discussions and announcement reduced the InTrade probability of a public plan by 15 percentage points:
And the values of Aenta, UHG, and Cigna jumped by 9%--$4.5 billion:
The stakes for the insurers are huge. The investors in them appear to believe that the public plan is nearly a life-or-death issue for the companies: each 1% increase in the chance of a public plan chops 0.6% off of the long-term value of the totalprofits--not the health profits, the total profits--from their business as they have to compete for real against the government in the health insurance market. As Bill Niskanen likes to say, given the amount of wealth at stake in congressional legislative decisions, it is an absolute miracle that every senator is not worth $100 million and that every House member is not worth $10 million.
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The Group of Six Senators Are Opposed to a Public Health Plan Because...
8/5/09 10:31 PM
And what does the New York Times tell us about the Group of Six, and how it is reaching its decisions? Things like this, the lead: David Herzhenhorn and Robert Pear: Health Policy Is Carved Out at Table for 6: WASHINGTON — On the agenda is the revamping of the American health care system, possibly the most complex legislation in modern history. But on the table, in a conference room where the bill is being hashed out by six senators, the snacks are anything but healthy. Last week, there were chippers — chocolate-covered potato chips — described on a sign as “North Dakota Diet Food.” More often, there are Doritos, pretzels, Oreo cookies and beef jerky: fuel to get through hours of talks on topics like the actuarial values of private insurance plans or the cost-sharing provisions of Medicare... In 30 paragraphs, Herzhenhorn and Pear provide their readers with only three nuggets of anything that could be called information: 1. "The group of six has tossed aside the idea of a government-run insurance plan that would compete with private insurers, which the president supports but Republicans said was a deal-breaker. Instead, they are proposing a network of private, nonprofit cooperatives..." 2. "They have also dismissed the House Democratic plan to pay for the bill’s... cost partly with an income surtax on high earners. The three Republicans have insisted that any new taxes come from within the health care arena..." 3. "The Senate group... seems prepared to drop a requirement... that employers offer coverage to their workers..." But they do not drop a single clue as to how a reader would go about trying to figure out whether these are good or bad decisions, or why these are the decisions being made. Instead we get paragraphs like this: Mr. Baucus says his group will produce the bill that best meets Mr. Obama’s top priorities, broadly expanding coverage to the uninsured and curtailing the steep rise in health care spending over the long term, what policy makers call “bending the cost curve”... And this: “There are not many occasions when we have the opportunity to sit down and immerse ourselves in an issue like this, an issue that has profound implications for the country, with historic overtones, to say the least,” Ms. Snowe said. “I feel privileged to participate”... And, of course, this: Then, there are the refreshments. The coffee, brewed in the office, is roasted in Montana, usually the Grizzly or Buffalo blends. For all the discussions about preventive medicine, and the need to encourage Americans to lead healthier lives, carrots and celery sticks are not typical... RECOMMENDED (5.0) by 4 people like you [How? ] You might like:
No, Megan, We Are Not For Health Care Reform Because We Hate Freedom (@this site) The Problem of Conrad and Baucus (@Daily Kos) 2 more recommended posts » Brad DeLong on August 01, 2009 at 09:54 AM in Economics, Economics: Health, Information: Better Press Corps/Journamalism, Obama Administration, Politics | Permalink TrackBack TrackBack URL for this entry: http://www.typepad.com/services/trackback/6a00e551f0800388340115715c4e71970c http://delong.typepad.com/sdj/2009/08/the-group-of-six-senators-are-opposed-to-a-public-health-plan-because.html
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The Group of Six Senators Are Opposed to a Public Health Plan Because...
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Comments You can follow this conversation by subscribing to the comment feed for this post. It's clear that disinformation is in much greater demand than information is - at least from the supplier's perspective. Posted by: Whispers | August 01, 2009 at 10:04 AM Money talks, health walks... And with health, the economy takes a hike too. Short term gains for the insurance companies are long term losses for the nation at large. These terribly misguided legislators (with campaign war chests nicely enriched by lobbyists, however) seem not to understand that if we fail to pass meaningful reform, health care costs will bankrupt American business in the very near future. Posted by: Anne W. | August 01, 2009 at 10:05 AM this is why i can never understand the people who think if only harry reid were tougher.... i'm honestly not sure, at this late date, how we keep this from happening, but the accumulated misallocation of resources from this kind of thing repeating over and over will certainly be part of the analysis future brad delongs make of the relative decline of american economic power in the 21st century. Posted by: howard | August 01, 2009 at 10:15 AM And reporters wonder why people are confused by the health care debate... Posted by: jwb | August 01, 2009 at 12:14 PM Baucus was on NPR a few days ago and did a curious bit of "doublespeak" (well, not curious - sadly business as usual). Basically he said they (his committee) weren't going to do the "public option" because the "votes are not there". Not once did he say he too was against the option, quite the contrary he made it sounds like some unnamed "others" were responsible. He completely whitewashed that the "votes are not there" because of HIM and the other Blue Dogs (tm). Very Orwellian. Very sick really. Worse NPR just let him have a free pass on this manipulation. Posted by: Matt Fahrner | August 01, 2009 at 01:11 PM Nor does the article say whether health care companies have donated to this gang of six. Until we make Senators wear the logos of their sponsors on their suits, NASCAR-style, we depend on papers like the Times to remind us which corporations these lawmakers are subsidiaries of. Posted by: Delicious Pundit | August 01, 2009 at 02:38 PM I didn't think the article was bad. It wasn't ground breaking in any sense, but it was a nice outline for what's happened thus far. I don't see why that's a problem. The real problem, as Delicious Pundit says, is that the article didn't discuss the insurance industry donations (assuming they exist) made to each senator. That's a much bigger issue. Posted by: Brian J | August 01, 2009 at 09:20 PM
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The Group of Six Senators Are Opposed to a Public Health Plan Because...
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