Maybe John McCain still believes that the health car plans offered by Democratic candidates “move closer to a nationalized health care system,” but he’s wrong. And we’re happy to report that The Associated Press now tells readers otherwise.
Neither the plan offered by Hillary Clinton nor Barack Obama even comes close to socialized medicine. We have been saying that for some time here at CJR, so we were pleased when the AP got right to the point in the lead of an informative story that moved on the wires Sunday. “Call it Obamacare or call it Clintoncare. But don’t call it ‘socialized medicine,’” the AP’s story began. It then defined what “to nationalize” means—it’s a transfer of ownership or control to the government—and observed that there’s “still a vast distance between what the Democratic candidates have proposed and nationalized health care.” Let’s hope the rest of the media follow the AP’s lead, and stop letting McCain get away with using the term erroneously.
Still, the AP might have done a little better in defining another loaded term, or argument, that slipped into its story and is slipping in to the health care discussion as a way of raising the specter of government health insurance—the term “crowd out.” The way economic policy wonks use it, “crowd out” means that if the government makes public insurance options (as Clinton and Obama have proposed as part of their plans) more attractive than those offered by commercial, profit-making insurers, people—being prudent consumers—will buy the public insurance plans. That, however, could take away sales from insurance carriers, and that scares the bejeezus out of them. Just to refresh—“crowd-out” is a big issue in Massachusetts, where policymakers are trying their darndest not to make the public insurance choices too attractive. And those who opposed expanding the State Children’s Health Insurance Program (SCHIP) last fall used the crowd-out argument against covering more kids. The other side of the argument is that a government option gives people more choice at perhaps lower cost, since the government administrative costs are lower, as Medicare demonstrates.
It’s a part of the debate that deserves clarity and context. So, the next thing reporters should be on the look out for are statements like this one embedded in the AP story. While the term “crowd-out” isn’t used, that’s really what this paragraph is talking about:
The candidates say the Medicare-like option they include in their health care plans offers additional competition that would benefit consumers. But if that plan is subsidized so generously that private companies can’t compete, then it has the potential to be the “backdoor to single-payer,” said Regina E. Herzlinger, a professor at the Harvard Business School.
Herzlinger is no ordinary B-School prof. She has written books pushing market-based approaches to reform, gives speeches on the topic, and is eminently quotable. That’s fine, of course, but voters need to know what side of the field she comes from. In this case, the AP didn’t tell them. And they need to understand what the crowd-out argument means—a way to protect the insurance industry. We bet that the “crowd-out” phenomenon will be hotly debated as McCain and the Democrat duke it out.