In health care debate, can we trust the president?


In the health care debate, President Obama pleads with Americans to get the facts straight before making up their minds. But that’s easier said than done, and by his actions, I wonder if the president really believes this.

Here’s an example: A page at under the title “Setting the Record Straight” holds this prominent statement: “It seems like a new lie about health insurance reform crops up each day. These lies create fear and anger — and we’re seeing the results around the country. It’s time to work together to set the record straight and expose the special interests and partisan attack groups who deliberately spread these rumors and lies in a desperate attempt to preserve the status quo.”

A direct quote from the president shown on this page is “Where we do disagree, let’s disagree over things that are real, not these wild misrepresentations that bear no resemblance to anything that’s actually been proposed.”

So what are “things that are real,” Mr. President? Here’s some Wall Street Journal reporting (Fact-Checking the President on Health Insurance: His tales of abuse don’t stand scrutiny, September 14, 2009) that casts doubt on the president’s truthfulness. Referring to the president’s address to Congress earlier this month:

Later in his speech, the president used Alabama to buttress his call for a government insurer to enhance competition in health insurance. He asserted that 90% of the Alabama health-insurance market is controlled by one insurer, and that high market concentration “makes it easier for insurance companies to treat their customers badly — by cherry-picking the healthiest individuals and trying to drop the sickest; by overcharging small businesses who have no leverage; and by jacking up rates.”

In fact, the Birmingham News reported immediately following the speech that the state’s largest health insurer, the nonprofit Blue Cross and Blue Shield of Alabama, has about a 75% market share. A representative of the company indicated that its “profit” averaged only 0.6% of premiums the past decade, and that its administrative expense ratio is 7% of premiums, the fourth lowest among 39 Blue Cross and Blue Shield plans nationwide.

Similarly, a Dec. 31, 2007, report by the Alabama Department of Insurance indicates that the insurer’s ratio of medical-claim costs to premiums for the year was 92%, with an administrative expense ratio (including claims settlement expenses) of 7.5%. Its net income, including investment income, was equivalent to 2% of premiums in that year.

In addition to these consumer friendly numbers, a survey in Consumer Reports this month reported that Blue Cross and Blue Shield of Alabama ranked second nationally in customer satisfaction among 41 preferred provider organization health plans. The insurer’s apparent efficiency may explain its dominance, as opposed to a lack of competition — especially since there are no obvious barriers to entry or expansion in Alabama faced by large national health insurers such as United Healthcare and Aetna.

The president and the Birmingham News certainly have different views of the facts.

That speech also told two tales of patients allegedly abused by their private insurance companies. Congressional testimony, however, provided a different set of facts than what the president presented in his speech (Fact-checking the president on health insurance).


3 responses to “In health care debate, can we trust the president?”

  1. LonnythePlumber

    We can certainly believe the President over the new publisher of the WSJ. Numbers are reported differently to support different assertions. Even if Blue Cross only has 75% of the market the point is still made about lack of competition.

  2. I have yet to find any reason to trust Barack Obama.

  3. […] Related on this site: Fact-checking the president on health insurance and In health care debate, can we trust the president? […]

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