Scary: Krugman's Idea of ObamaCare Success Story

Scary: Krugman's Idea of ObamaCare Success Story
Profile photo of Robert P. Murphy

Paul Krugman has made another installment in his campaign to promote the wonders of ObamaCare. In this post, Krugman laments that New Yorkers of all people don’t recognize how great the new health insurance regime is working  out. He tells a personal anecdote to motivate his discussion of this mystery:

Over the weekend I had dinner in NYC with some very smart, sophisticated people; yes, all of them liberals. And almost everyone in the group was under the impression that Obamacare is Nobel Prize winning economist Krugman speaks during an interview in New Yorkstill going badly — they wanted me to tell them whether it could still be turned around.

Meanwhile, New York (which created its own exchange) is a huge success story: enrollment is 60 percent higher than federal projections, premiums have been cut in half.

An aside: New York was already a community-rating state, where insurers weren’t allowed to discriminate based on medical history. But the result of that system was that healthy people tended to stay out of the individual market, creating a bad risk pool that drove up rates. Now everyone has to be in, dramatically improving the risk pool. As such, the New York experiences demonstrates the essential role of the individual mandate for reform.

But anyway, back to the mystery: here we have smart, pro-reform people living in a state where reform is going really well. And they don’t know it!

Krugman then goes on to lament that the New York state “huge success story” article (which was in the New York Times) was on page A16, rather than receiving top coverage. So no wonder Krugman’s sophisticated liberal dinner companions hadn’t heard the great news…

Funny thing is, if you actually click the link, you’ll see the story is much more nuanced than our Conscientious Liberal led his innocent readers to believe. For the rest of the post, I don’t need to offer my own cynical analysis; I just need to quote from the very article Krugman cited as proof of how great ObamaCare can be:

…New York State, almost from the start, has provided a textbook lesson in how to make the Affordable Care Act work. But it has done so by making some tough decisions.

But New York also took some aggressive and unpopular steps that few other states have taken, by creating a highly centralized system limiting consumer choice, essentially giving insurance seekers little incentive to shop off the exchange.

As a result, most New Yorkers who are not insured through an employer are effectively barred from choosing any doctors or hospitals they want.

At least 100,000 people have lost their old health plans because they did not conform to new federal requirements. Thousands more freelancers and other “sole proprietors” were barred from banding together for group insurance rates, a change in longstanding practice that almost certainly pushed more consumers to buy insurance on the exchange.

In an unusual decision that had a strong impact on consumer choices, New York required insurers to offer the same type of coverage on the exchange as off.

The result was that none of New York’s insurers offered out-of-network coverage for individuals, except in a small part of western New York, because they wanted to hold down costs and avoid being swamped by sick people. So regardless of whether individuals buy their plans on the exchange or off, they cannot get coverage outside a fixed network of doctors and hospitals, even if they are willing to pay more for it.

The sickest customers tend to be the most upset, like Abigail List, a 53-year-old therapist in Manhattan, who said she had to choose one of the most expensive plans, costing $300 more a month than others, so she could have coverage for her longtime cancer doctors at NYU-Langone Medical Center. “I’m being railroaded, that’s why I’m so furious,” Ms. List said.

Now remember as you read the above: This isn’t from a hit piece put out by the Heritage Foundation. This is from a New York Times article that Paul Krugman himself singled out as evidence of how great ObamaCare would work for the country as a whole. And he mentioned not one word about the “at least 100,000” people losing their old plans, or the very sick people who are now “furious” because they have to pay thousands of dollars more per year if they want to keep seeing their original doctors.

Who in his right mind would trust his health care to the wisdom and care of policy wonks like Krugman?

  • @OnlookerfrTroy

    Well, as you know, intellectual honesty isn't his strong suit. :-)

Profile photo of Robert P. Murphy

Robert P. Murphy is the Senior Economist at the Institute for Energy Research, and a Senior Fellow with the Fraser Institute. He holds a PhD in economics from New York University. Murphy is the author of Choice: Cooperation, Enterprise, and Human Action (Independent Institute, 2015) as well as numerous other books and hundreds of articles.

More in Blog


Bank of Canada Raises Interest Rates… Again

Caleb McMillanSeptember 6, 2017

Free the Arctic!

Patrick BarronAugust 29, 2017

Preposterous Bubble Predictions and the Madness of Crowds

Doug FrenchAugust 21, 2017

The Bond Bubble

Caleb McMillanAugust 16, 2017

The Reason for Statist Immigration

Caleb McMillanAugust 15, 2017

Is Bitcoin a Bubble?

Caleb McMillanAugust 14, 2017

Why Obamacare Repeal Failed

Taylor LewisAugust 2, 2017
Screen Shot 2017-07-25 at 12.27.53 PM

GDP, GPS, & Growth Without Well-Being

Caleb McMillanJuly 25, 2017

The Real EU Aim in Brexit Talks and Why It Will Fail

Patrick BarronJuly 19, 2017