In which Avik Roy rehashes 1 BS claim & misses the damned point otherwise (UPDATED)

Hat Tip To: 
Mike M.

(sigh) Here we go again. Over at Forbes, Avik Roy has decided that his contribution to celebrating the labor movement should be to trash the Affordable Care Act again, even though it's based primarily on his old boss's policy in Massachusetts.

There are some areas of his latest which I'm not equipped to address, but there are two points which jump out at me:

First, he brings up 2 surveys from the Federal Reserve Bank of New York about how business owners feel about the impact of the ACA on their expenses and employment.

I should first note that Roy refuses to refer to the healthcare law by anything close to its actual name. He doesn't call it the "Patient Protection & Affordable Care Act". He doesn't call it "the Affordable Care Act". He doesn't even call it "the ACA", which would make the most sense...not even once.

Nope, he refers to it as "Obamacare". Not just in the headline, not just once or twice in the article, but twenty-five times. I counted.

Now, I don't happen to have a problem with the "Obamacare" moniker. I think in the long run the GOP will regret tying the law to Barack Obama's name so closely. But THEY think it's an insult, and keep throwing it around as often as possible.

This strikes me as being very similar to the childish tendency of Republicans to insist on referring to "Democrat" at all times, even when it makes no sense grammatically. You know: "He's a Democrat President" instead of "He's a Democratic President" and so on. The idea, of course, is that emphasizing the "rat" part is supposed to psychologically make people associate members of the Democratic Party with rats. I've no idea whether this actually works or not, but they keep doing it. The fact that "Democrat" is the correct term in some cases confuses the issue, of course.

Anyway, Roy knows damned well that calling the law by its actual name emphasizes what it's about (Patient Protection and Affordable Care), whereas calling it "Obamacare" every single time makes it sound Otherly. In fact, calling it anything except "Obamacare" polls better, because people recognize that it actually does quite a bit of good...as long as it wasn't thanks to that darned BlackKenyanMuslimWhatever.

But I digress.

As I said, he cites surveys by the Fed of NY, in which they asked business owners what impact being required to offer decent healthcare coverage to their employees is going to have next year.

Needless to say, a large number of the business owners think that this will cost them more money, and therefore don't seem too keen on this requirement. This isn't exactly an earth-shattering discovery.

My response is this: If "offering decent healthcare coverage to your employees" is so terribly awful for business, why have so many employers been offering it for so long in the first place? More specifically, why has Walmart (which has treated most of their employees like crap in the past) been doing so poorly in recent years, while Costco, which famously has offered full healthcare benefits (as well as very good wages) to their employees for years continues to kick butt? Why do companies like Apple (which knows a thing or two about profitable business practices) offer full benefits, even to part-time employees?

Perhaps it's because a healthy employee is a happier and more productive one? Perhaps because you really don't want a sick employee to infect the rest of your workforce? Perhaps it's because you don't want your customers being vomited on in Aisle 9?

As an addendum, it's interesting that the NY Fed survey that Roy links to doesn't list their methodology, so there's no way of knowing what the sample size was, what types of businesses were surveyed (beyond "manufacturing" and "service") and so on. This was a "supplemental" report so perhaps these answers are included in the original...but without knowing who and how many they surveyed, we run into the same issues that the Dallas Fed survey had last month (for all I know, the Philadelphia and Dallas surveys are the two referred to by the NY study...I'm not sure about this).

This brings me to the 2nd point, near the very end, where he dredges up the disingenuous, misleading and long-since debunked interpretation of the CBO's statement about the impact of the ACA on the job market:

The Congressional Budget Office has estimated that by 2024, Obamacare will reduce the size of the labor force by 2.5 million full-time-equivalent workers. Then-White House press secretary Jay Carney celebrated the findings, arguing that they mean that Americans would no longer be “trapped in a job.” Oh?

If Republicans take control of the Senate in 2014, this is exactly what they should focus on: making the labor market a springboard, rather than a “trap.”

"Oh?", Mr. Roy asks sarcastically. Yes, Mr. Roy: That's exactly what the ACA does, and this is a good thing. As Glenn Kessler put it way back in February:

Some people might decide to work part-time, not full time, in order to keep getting health-care subsidies. Thus, they are reducing their supply of labor to the market. Other people near retirement age might decide they no longer need to hold onto their job just because it provides health insurance, and they also leave the work force.

Look at it this way: If someone says they decided to leave their job for personal reasons, most people would not say they “lost” their jobs. They simply decided not to work.

The CBO, in its sober fashion, virtually screams that this is not about jobs. (Note the sections in bold face.)

“The estimated reduction stems almost entirely from a net decline in the amount of labor that workers choose to supply, rather than from a net drop in businesses’ demand for labor, so it will appear almost entirely as a reduction in labor force participation and in hours worked relative to what would have occurred otherwise rather than as an increase in unemployment (that is, more workers seeking but not finding jobs) or underemployment (such as part-time workers who would prefer to work more hours per week).”

Better yet, I can give a very personal example: My own wife left her own corporate position (with benefits) a few years ago, in order to start up her own consulting business. She was utterly burned out and wanted to try something new, and yes, a big part of the reason she stayed there as long as she did was for the healthcare benefits (I'm self-employed, so my son and I were on her policy, of course).

Now, in our case, we were able to afford to switch to private insurance on the individual market without the subsidies...but just barely. How many millions of other people are in the same situation that we were, except that they couldn't afford to take the plunge to start up their own business (something which conservatives supposedly love) without the subsidies now provided by the ACA? The CBO provided a pretty clear answer: A lot.

So, what's the result of her decision? Well, she's a successful entrepreneur now, while she's presumably been either replaced at her old job by someone else (ie, 2 jobs created where there was 1 before) or, conceivably, her position might have been phased out instead (thus saving her old employer some salary/benefits cost).

That's what the CBO was talking about in February, and yes, "cutting the cord" between employers and health insurance is actually not such a bad thing overall.

Of course, this makes it sound like I'm arguing against the employer mandate. Perhaps I am, in a way. It's my understanding that some businesses have crunched the numbers and decided that they'd be better off paying the per-employee fee for not covering their employees...which amounts to paying higher corporate taxes in order to help increase the subsidy funds available to help out those same employees on the ACA exchanges.

So, is there a contradiction between my two points re employee sponsored insurance (ESI = Good, ESI = Bad)? Not at all. Wise companies know that healthy employees make for better business. They'd prefer not to have the problem dumped on them...but if the problem can't be resolved by some other means, it's still better for them to take it on then for their workers to be sneezing into the chili powder or whatever all the time.

The ACA hacks away at the uninsured/underinsured problem from several different directions. From the low-income/unemployed side, there's Medicaid. From the mid-income side, there's the subsidies. From the employed side, there's the employer mandate. From the young adult side there's the "sub26er" rule and from the scam artist/slimy provider practice side, there's the regulations (80/20 rule, no denial for pre-existing and so on).

This is obviously a pretty convoluted, roundabout way of ending up with the same end result. If it were up to me, instead of the money going from the Taxes/Fees > Govt > Tax Subsidies > Private Insurers > Healthcare Providers, we'd just cut through all the BS and set up single payer nationally: Taxes > Govt > Providers. This would get rid of the tax subsidies that Roy hates so much, but would also cut private insurers out of the loop, which of course he'd be livid about.

UPDATE 09/03/14: Remember how I noted, as an aside, that Roy insisted on using the term "Obamacare" no fewer than twenty-five times in his article while refusing to use the actual name of the law (or even the "ACA" acronym) even once?

As you might have guessed, he's not alone:

As I’ve noted before, many Republican Senate candidates are basically running against the word “Obamacare” while professing general support for its overall goals and fudging on whether they’d take its benefits away from people. This new spot shows Republicans running against this thing called “Obamacare” they created years ago and still can’t let go of. 

UPDATE 09/04/14: Thanks to Lois Newton for sending me the link to the Fed survey's methodology:

The survey is sent on the first day of each month to the same pool of about 200 manufacturing executives in New York State, typically the president or CEO. About 100 responses are received. Most are completed by the tenth, although surveys are accepted until the fifteenth.

Respondents come from a wide range of industries from across the New York State. No one industry dominates the respondent pool.

The survey's main index, general business conditions, is not a weighted average of other indicators—it is a distinct question posed on the survey. Each index is seasonally adjusted when stable seasonality is detected.

OK, so again, this is basically a self-selecting survey, with a pool of not just 100 corporate CEOs/Presidents, but the same CEOs/Presidents (or at least the same companies every time).

There was a lengthy discussion about polling methodology and the like in the comments of the Texas Fed survey entry. The gist of it seems to be that, as Johnnie Goode put it:

A scientifically constructed survey of 85 [in this case, 100] might tell you something. Political polls of 500 or 1000 usually randomly select respondents. These 85 [100] self selected to answer the question. Generally the people who are most upset are the ones most likely to self select.They are mad and they want someone to know it. And even among this group,  (only)1 in 4 say its impacting their hiring.

The exact same point can be made here, though with somewhat fewer stereotypes about biases against President Obama. While the methodology does state that respondents come from a "wide range of industries" across the state, it still doesn't indicate whether the respondents were disproporationately large or small (1 large manufacturer keeping pricing the same can easily overbalance 10 small ones raising prices) and so on.

And, again, it's not exactly shocking that a high percentage of manufacturing business owners aren't happy about being required to shell out extra money for business overhead.