John Podhoretz: An Exercise In Deception

By Joe Cereola
You can always count on Facebook for reliable links to misinformation. That's how I found John Podhoretz and his shockingly misleading opinion piece in today’s New York Post. Podhoretz doesn't like the Affordable Care Act (ACA), and he's been busy misinterpreting the latest Congressional Budget Office (CBO) report in an attempt to condemn the ACA. Saying that he misinterpreted the CBO report implies he attempted to be fair in his analysis, when in fact he quoted sections of the report out of context and neglected to mentions portions of the report that contradicted his opinion.

His key complaints: “Virtually as many Americans will lack health coverage in 10 years as before the law was passed — but 2 million fewer will be working than if the law hadn’t passed.”

The report does not say 2 million fewer people will be working. It states: "The reduction in CBO’s projections of hours worked represents a decline in the number of full-time-equivalent workers of about 2.0 million in 2017, rising to about 2.5 million in 2024.” This is almost entirely due to workers willingly reducing their hours; they are not exiting the workforce. Employers' demand for workers will remain essentially unchanged.

The CBO estimates that the ACA will reduce the total hours worked by 1.5 to 2.0 percent, but because the reduction in the labor will occur primarily among lower-wage workers, the aggregate drop in employee compensation should only be about 1.0 percent.

Some workers are shackled to full-time jobs merely to maintain health insurance; they now have other options and some will choose to work less. Others will work less to keep their income below the levels needed to maintain their insurance subsidies. Podhoretz insists this is one of the perverse incentives of the ACA. But the real perversity here is that wages are so low that the marginal return on working more hours offers no incentive to work beyond what is necessary to survive. 

Podhoretz also ignores the CBO’s disclaimer that the “estimate of the ACA’s impact on labor markets is subject to substantial uncertainty, which arises in part because many of the ACA’s provisions have never been implemented on such a broad scale and in part because available estimates of many key responses vary considerably.” To estimate the ACA's impact on labor markets, the CBO relied on research "concerning the way changes in marginal tax rates affect labor supply and on studies analyzing how labor supply responds to changes in after-tax income." This previous research may not accurately model the labor market response to the ACA

Podhoretz claims “ObamaCare’s key selling point was that it would give coverage to a significant number of the 30-plus million Americans who lack it.” He then quotes the CBO report: “About 31 million nonelderly residents of the United States are likely to be without health insurance in 2024, roughly one out of every nine such residents.” Finally, Podhoretz concludes: “Now the CBO is saying is that in 10 years, about the same number of people will lack insurance as before. This, after new expenditures of as much as $2 trillion and a colossal disruption of the US medical system.” 

What Podhoretz conveniently ignores is that the CBO estimates "that the insurance coverage provisions of the ACA will markedly increase [emphasis added] the number of nonelderly people who have health insurance—by about 13 million in 2014, 20 million in 2015, and 25 million in each of the subsequent years through 2024.”

How can number of nonelderly with insurance coverage increase if 31 million non elderly residents still lack coverage, roughly the same number as prior to the ACA? First, Podhoretz failed to consider that the nonelderly segment of the population will grow by about 7.6 million from 2015 to 2025. Second, the president was referring Americans who lacked insurance while the CBO report refers to residents of the United States, a group that includes unauthorized immigrants that are ineligible for most healthcare benefits. Here’s what the report says regarding the 31 million nonelderly residents that still lack coverage in 2024:

“Of that group, about 30 percent are expected to be unauthorized immigrants and thus ineligible for most Medicaid benefits and for the exchange subsidies; about 20 percent will be eligible for Medicaid but will choose not to enroll; about 5 percent will be ineligible for Medicaid because they live in a state that has chosen not to expand coverage; and about 45 percent will not purchase insurance even though they have access through an employer, an exchange, or directly from an insurer.”

So let's count Podhoretz's errors and omissions. He neglects to factor in population growth; he fails to discriminate between citizens and unauthorized immigrants, and he ignores the unambiguous statement in the CBO report that the ACA will “markedly increase the number of nonelderly people who have health insurance.” Is there any doubt that Podhoretz's primary purpose is to deceive readers into believing that the ACA failed to expand health insurance coverage?

Podhoretz’s column was too carefully crafted to be dismissed as careless journalism, and I have no problem calling it what is: an exercise in deception.