Update Wed. a.m.: NYT makes up an absurdly false headline implying Obama promised the public plan would never cause private insurers to lose business.

"Why, oh why, can’t we have a better press corp?" — Brad DeLong et al

In his press conference, the President responded to questions arguing that a public plan will drive private insurers out of business. The private insurers’ letter to Congress had claimed that:

""We do not believe that it is possible to create a government plan that could operate on a level playing field, . . . Regardless of how it is initially structured, a government plan would use its built-in advantages to take over the health insurance market. . . . A government-run plan no matter how it is initially structured would dismantle employer-based coverage, . . ."

When reporters asked about this, the President responded:

OBAMA: Why would it drive private insurance out of business? If private insurers say that the marketplace provides the best quality health care; if they tell us that they’re offering a good deal, then why is it that the government, which they say can’t run anything, suddenly is going to drive them out of business? That’s not logical.

But in an Evening News segment entitled, "Would an Overhaul Hurt Health Care?" CBS reporter Sherryl Atkinson did her usual lazy job, saying that “some experts agreed" with the industry.

As proof, she quoted only an “expert” from the pro-private-market Cato Institute, who said, with no basis whatsoever, that the government would give the public plan unwarranted subsidies to create unfair competition, an argument Atkinson then repeated. Atkinson concluded that employers would drop their private plans, leaving employees with only the public plan.

ABC’s report on the presser pushes the unsupported argument even further:

Obama also seemed to back off from his promise that people who like their health care plans will be able to keep them under his plan for reform, and instead of saying that "no one" will take away any American’s health insurance, today he said only that the government would not do so.

ABC News asked how the president could make such a guarantee if the public-run plan was cheaper, thus possibly enticing employers to enroll employees in that plan.

"When I say if you have your plan and you like it, you have a doctor and you like your doctor, that you don’t have to change plans, what I’m saying is the government is not going to make you change plans under health reform," the president said.

This was a shift from what the president said just last week, when he told a gathering of the nation’s doctors, "If you like your doctor, you will be able to keep your doctor, period. If you like your health care plan, you’ll be able to keep your health care plan, period. No one will take it away, no matter what."

Today Obama pinned the possible changes on employers, who may adjust their health care plans due to costs, and maintained that the government will not be the force behind the changes.

"I can guarantee you that there’s the possibility for a whole lot of Americans out there that they’re not going to end up having the same health care they have," he said. "Because what’s going to happen is, as costs keep on going up, employers are going to start making decisions. We’ve got to raise premiums on our employees. In some cases, we can’t provide health insurance at all.

So what’s going on? What the President explained is that the private insurance premiums employers face today are rising so fast that some employers will likely stop offering/contributing to health coverage. That could cause consumers to lose the coverage and possibly the doctors they have now. That will happen if we do nothing, but ABC confused that with something that could occur as a result of reform.

ABC is thus repeating another industry argument, which says that the mere existence of the public plan will induce employers to drop their private plan coverage, forcing the employees to find an alternative. Hence, they argue, reform itself will result in employees loosing the coverage they now have.

But notice what this industry argument says. The industry claims there’s sufficient competition now. But if that’s true, then employers now are free to change private plans, which can result in changes of coverage and/or providers for their employees. So what the argument says is that forced change is normal and okay when imposed by employers choosing between private insurers; but it’s unacceptable if the alternative is a better public plan. Of course, if such changes don’t often happen today, it simply means that the industry claims of existing competition and choice are mostly false. (See Krugman)

The argument also ignores the fact that Congress is working on “Pay or Play” rules, as part of an "employer mandate." For example, if an employer who contributes to it’s employee plans today decides in the future to stop offering those plans to some employees, the “pay or play” rules would require the employer to “pay” a contribution to help cover whatever alternative coverage the employee chooses. Otherwise, an “employer mandate” is meaningless.

The Play or Pay rule removes/reduces the incentives for employers to abandon plans they now offer, unless new alternative choices that become available are clearly superior. But of course, if that’s true, then the employees themselves should benefit from that change, and the employer would be foolish not to support it.

So CBS just shilled for a phony industry argument and asked only a Cato market advocate but never asked any expert who might have corrected the reporter’s misrepresentation. And ABC manufactured a phony argument that creating another choice for employees will force them to lose what they have, even though the real reason for that change is the inferiority of the private plans they’re stuck with today.

The lazy elements of our media are showing once again that they can’t sort out the simplest arguments, are easily misled, don’t know whom to ask and are willing to be spun by industry hacks.

More
Paul Krugman, on [Mis]Reporting on Health and the health of reporting

Update: The NYT makes up a false headline, "Obama Says Government Health Coverage Plan Would Not Hurt Private Insurers," even though the article itself shows the President made no such promise. The false/misleading headline appears in both print and online versions, and the Times should make an immediate correction.

As is clear from the presser quotes above, the President did not promise private competitors would not be hurt by competition. He merely described the multiple, inconsistent claims being made by the insurers as "not logical." He also noted that consumers would make the choices that determined which competitors did well and which did not.

But the facts won’t matter. We can now expect the industry and Republicans to falsely claim, citing "even the liberal Times," that the President is not credible because he claimed/promised that if a public plan competes with private insurers, none of the latter would ever lose any business.