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Sunday, October 20, 2013

Paul Krugman, "Lousy Medicaid Arguments": Do You Believe in Obama, Krugman and the Tooth Fairy?

Do you remember how Obama recently stated in defense of the disastrous inauguration of Obamacare:

"Just a couple of weeks ago, Apple rolled out a new mobile operating system, and within days, they found a glitch, so they fixed it. I don’t remember anybody suggesting Apple should stop selling iPhones or iPads or threatening to shut down the company if they didn’t."

Well, as reported today in a New York Times article entitled "Contractors See Weeks of Work on Health Site" ( by Sharon LaFraniere, Ian Austen and Robert Pear:

"Federal contractors have identified most of the main problems crippling President Obama’s online health insurance marketplace, but the administration has been slow to issue orders for fixing those flaws, and some contractors worry that the system may be weeks away from operating smoothly, people close to the project say.

. . . .

Some specialists working on the project said the online system required such extensive repairs that it might not operate smoothly until after the Dec. 15 deadline for people to sign up for coverage starting in January, although that view is not universally shared.

. . . .

One specialist said that as many as five million lines of software code may need to be rewritten before the Web site runs properly.

. . . .

One major problem slowing repairs, people close to the program say, is that the Centers for Medicare and Medicaid Services, the federal agency in charge of the exchange, is responsible for making sure that the separately designed databases and pieces of software from 55 contractors work together. It is not common for a federal agency to assume that role, and numerous people involved in the project said the agency did not have the expertise to do the job and did not fully understand what it entailed."

Thanks for the straight talk, Mr. President.

But none of the above prevented Paul Krugman, today, in a New York Times op-ed entitled "Lousy Medicaid Arguments" (, from claiming:

"It’s important to realize, however, that this botch has nothing to do with the law’s substance, and will get fixed."

Or in other words, Obamacare's Internet portal may have to be scrapped, but this has nothing to do with "the law's substance." Or does it?

If it is "not common for a federal agency to assume [the role of creating the Obamacare website], and numerous people involved in the project said the agency did not have the expertise to do the job and did not fully understand what it entailed," why should we believe that they have any more expertise in running a health insurance business? They don't . . .

What's that you say? Federal government experience amassed by way of administering Medicaid and Medicare? Yup, no waste or fraud there.

Regarding Obamacare "rate shock," Krugman's opinion piece continues:

"Remember 'rate shock'? A few months ago it was all the rage in right-wing circles, with supposed experts claiming that Americans were about to face huge premium increases.

It quickly became clear, however, that what these alleged experts were doing was comparing apples and oranges — and as Ezra Klein of The Washington Post pointed out, oranges that, in many cases, you can’t even buy. Specifically, they were comparing the premiums young, healthy men were paying before reform with the premiums everyone — including those who previously couldn’t get insurance because of pre-existing conditions — will pay under the new system. Oh, and they also weren’t taking into account the subsidies many Americans will receive, reducing their costs.

Now people are signing up for policies on state exchanges and, to a limited extent, on the federal exchange. Where are the cries of rate shock?"

Ah yes, "the subsidies many Americans will receive." But as Krugman well knows, there is no zero-sum game at work here. If someone pays less, someone else must pay more, unless, of course, you simply add the amount to America's growing $17 trillion national debt. Where are the cries of rate shock? Let's wait until the system is up and running, perhaps sometime in 2014, before drawing conclusions.

It's worth noting that Avik Roy wrote in a Forbes article entitled "Obamacare's Website Is Crashing Because It Doesn't Want You To Know How Costly Its Plans Are" (

"A growing consensus of IT experts, outside and inside the government, have figured out a principal reason why the website for Obamacare’s federally-sponsored insurance exchange is crashing. forces you to create an account and enter detailed personal information before you can start shopping. This, in turn, creates a massive traffic bottleneck, as the government verifies your information and decides whether or not you’re eligible for subsidies. HHS bureaucrats knew this would make the website run more slowly. But they were more afraid that letting people see the underlying cost of Obamacare’s insurance plans would scare people away."

So whom do you believe, Obama, Krugman and the tooth fairy or Roy?

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