It’s always good to get the perspective of the people on the ground when reporting on a policy. However, when they say things that are clearly not true, reporters should provide readers with the correct information. The NYT fell down on the job in a piece that presented the views of a number of people in Massachusetts who were unhappy with the mandate and employer penalties in its health care law, which is the model for Obamacare.
The piece begins by telling us about Wayde Lodor, a 53 year-old independent product development consultant from Leominster. Mr. Lodor says that he is in good health and therefore does not want to buy insurance for himself and his college age daughter. The article tells us that Lodor estimates the cost of this insurance at $1,200 a month.
A quick visit to the Massachusetts insurance exchange reveals that the lowest cost plan for a 53-year old with one dependent child would be $685. This is only a bit more than half of Mr. Lodor’s estimate of what he would have to pay to comply with the mandate. It would have been helpful to tell readers that Lodor had seriously over-estimated the cost of complying with the mandate.
The piece then talks to Teofilo Cuevas, who it tells us earns about $40,000 a year as a meat cutter at a grocery store. Mr Cuevas has apparently dropped his employer provided insurance because he could not afford the co-payments. It would have been useful to note that Mr. Cuevas’ income would qualify him for subsidies under the Massachusetts plan. He would not be required to pay more than $235 a month. That may still be a serious burden, but it would have been useful to provide this information.
The next source is a small business owner, Ronn Garry Jr., owner of Tropical Foods. a grocery store in the Roxbury section of Boston. Mr Garry complained that the $295 per worker penalty for firms cost him nearly $30,000 a year. Actually, 70*$295 = $20,650. This would usually be thought of as close to $20,000, rather than nearly $30,000.
The piece also relies on Garry’s claim that he faces this fine only because not enough workers signed up for his employer provided plan. It is possible that Garry provides little subsidy with this plan so that it is unaffordable for most of his workers.
Finally, the piece turns to William Fields, who is described as “a consultant in Boston who helps employers comply with the law.” Mr. Fields is quoted saying:
“You have some of those who are truly bad guys and should be fined,. … But the ones that are personal to me are the $50,000 fine that puts my client out of business.”
Fields does not give any examples of businesses that were closed because of this fine. It would have been worth pressing him on the topic because it is not clear what he thinks he is saying.
Any business that goes under is by definition marginal. This means that any expense can be seen as putting it under. This could mean its electric bill, a dry-cleaning bill, or any other item. To owe a $50,000 fine the business would need to have 170 employees. A firm with 170 employees would typically have sales of at least $5 million a year. The odds are that if a $50,000 penalty caused such a firm to close, it probably would have gone out of business in any case. In other words, this firm was on its way down and paying the fine really did not affect its fate.
It would have been helpful to readers if this article had made an effort to determine the accuracy of the assertions these people were making rather than just reporting them unquestioningly.
Economist Dean Baker is co-founder of Center for Economic Policy and Research and writes regularly on CEPR’sBeat the Press blog, where this post first appeared.