The Big Lie in the "Crowd Out" Argument

Words matter. So let me once and for all tackle the argument you will heard constantly from the forces of the status quo, as it was just posted on John Goodman’s blog today by Devon Herrick: “A Lewin Group report estimates that 32 million people would lose their private coverage and enroll in the public plan if it paid Medicare-level reimbursements and eligibility were limited to the small firms, self-employed and individuals.” I know he wanted his readers to see that “would lose their private coverage” line because he made that the hyper-link, so it visually stands out. Here’s the problem: it’s bunk.

(Side note: here’s the other problem. Mr. Herrick apparently didn’t quite understand the two scenarios presented by the Lewin Group’s report. The number he quotes is if the private plan doesn’t pay Medicare-level reimbursements but instead negotiates its rates with providers. As I wrote previously, it doesn’t make much sense to import the Medicare rates. Hopefully future practitioners of the “lost coverage” fib will at least summarize the frakkin' analysis correctly.)

The best way I can explain this is through an analogy.

When I lived in New Hampshire a couple of years ago, my trusty automobile was totaled in a three-car pile-up in which I was the “peanut butter and jelly” in the automotive sandwich. Needing a car urgently and with extremely limited funds, I bought a heavily-used 1990 white GMC Jimmy. Almost from the moment of purchase, the car did not grant me much security – the engine stalled out while on the highway (mercifully moments after I pulled onto the off-ramp, unfortunately not before I was actually off said off-ramp), the brakes needed to be replaced two months later, the gas mileage was abysmal (sorry, Emily), and it abruptly started emptying its anti-freeze into the cabin one cold day. The beast was dubbed “Truckasaurus,” my fiancée declared undying enmity towards it, and I then proceeded to pour money both on gas and to fix the never-ending supply of surprise problems and weaknesses. When I moved back to New York City, I’d had enough. I sold the truck (making back the tiniest fraction of what I’d spent on it) and traded it in for a monthly Metro Card for the New York Subway. Say what you want about the publicly-administered MTA, but it provides me the coverage and security I lacked in my car at a fraction of the cost. I didn’t have to choose it – I could have tried to navigate my NYC transportation needs by keeping my old car. But I didn’t want to. As a consumer, I made the choice that was right for me and my circumstances.

By Mr. Herrick’s rhetoric, as well as the rhetoric of those opposed to the public plan or health care in general, I didn’t make a choice as an informed consumer, a process conservatives and free market economists extol. Instead, they would say I lost my car.

Should a public plan be part of the comprehensive health care reform package, no one loses anything. The consumer – either the employer or the uninsured individual – makes a choice. If it’s structured right, and the situation arises where I’m a diehard private insurance guy but my small business boss buys into the public plan for employee coverage, I have the ability to say no and get my own affordable private insurance. If the Lewin Group with its flawed and questionable assumptions demonstrates anything, it’s that between 40 and 130 million Americans would make that choice.

No one loses coverage. Instead, we gain a choice. Period.

(Photo credit of a similar truck to Truckasaurus: [RoRRo] on Flickr.)