News Story

Is it a Lie to Call Obamacare a "Government Takeover" of Health Care?

The Pulitzer Prize winning fact-checking organization PolitiFact gained national media attention Friday with its claim that its “Lie of the Year” was that Obamacare was a “government takeover.”

“The phrase is simply not true,” PolitiFact wrote.

PolitiFact is a project of the St. Petersburg Times and claims that it tracks “truth in politics.” The fact-checking is done by the newspapers’ reporters and researchers.

But the newspaper’s ability to judge truthfulness has been questioned. Fox News commentator Bill O’Reilly lists the St. Petersburg Times as one of just11 news organizations in the country in his “Hall of Shame” for distributing “defamatory, false or non-newsworthy information supplied by far left websites.”

PoltiFact Reporters Bill Adair and Angie Drobnic Holan didn’t respond to e-mails seeking comment.

Below, two experts on health care policy do a “fact check” of their own on PoliticFact’s conclusion.

Antony Davies, Associate Professor of Economics at Duquesne University and Visiting Scholar at the Mercatus Center at George Mason University:

I heard this on the radio this morning. It’s a bit of a stretch, but I wouldn’t list it as a lie and certainly not the #1 lie.

The question is, what do we mean by “government takeover”? In its most literal sense, a “government takeover” is a situation in which the government replaces the private sector in providing a good or service. Once upon a time, we had a citizen militia. Government took over national defense and now we question whether private citizens should even own guns. Public education is a partial government takeover because, although the government produces education directly, there is a parallel private market.

There is another, less literal but very much real, interpretation of “government takeover.” In this second interpretation, the private sector continues providing the good or service but the government regulates the industry, so much that the private sector becomes the government’s pawn. In the sense of this second interpretation, the government is most certainly taking over health care. Yes, insurance will still be provided by the private sector, but Obamacare will dictate the prices that insurance companies can charge, whom insurance companies will insure, and what ailments insurance companies will cover. At the end of the day, the government is making all of the strategic decisions that a private insurer heretofore would make for itself. In every sense except explicit ownership of insurance companies, the government has most certainly taken over health care.

It gets worse. Not only has the government taken over the health care industry, it has also taken over health care consumers. Obamacare dictates who will and will not buy insurance and how much insurance they will buy.

Robert E. Moffit, Senior Fellow, Center for Policy Innovation, The Heritage Foundation

“Government Takeover” is the key phrase. The Obama Administration and its allies insist that the only legitimate meaning of “government takeover” is government ownership of the means of production and distribution in the health care sector of the economy. In other words, if there were a “real” government takeover, doctors would be federal employees and hospitals would be government institutions, like the Post Office.

Well, here’s another way to look at it: who will make all of the key decisions over your health care? Not you.

Obamacare is a federal takeover. Your relationship to the federal government as a citizen will be changed: you will be legally required to buy government-approved insurance coverage,  and you will either become dependent on government or a financier of greater government dependency. You will see a mandatory expansion of government coverage and spending, mostly through Medicaid, and a continuing “crowd-out” and consolidation of private insurance.

And state officials will see a massive erosion of their authority, particularly in the regulation of health insurance. They will be reduced to agents of federal health policy. The federal government will control more of your health care dollars, and you will have less personal freedom

The crucial question is: Who decides? 

Under Obamacare, federal officials- not you, your employer or your insurance company- will make the key decisions in health care.

Federal officials will require you and your employer to buy a federally-approved health plan or pay federal fines and penalties. They will define and redefine the content of your health benefits package, including the medical treatments and procedures you must have.: the kind and level of preventive health care services you must have; the level of coverage that you must have; and the level of cost sharing, deductibles and co-payments that are legally permissible. You get what the federal officials say you will get, or you will be penalized. 

For health insurers, the federal officials will determine more than the content of their health insurance offerings. They will also make and apply federal rules for their rating, cost sharing and deductible levels; for how much they must pay out in medical benefits and how much they may retain for administrative expenses; for what their dollar limits on coverage are to be and when they are to be established; and for what level of premiums are “justifiable” and what level of premiums are not.

Federal officials, in concert with state officials, can exclude insurers from competing in the federally-designed state health insurance exchanges, the new markets for health insurance, if insurers do not offer written justifications for their premium increases that will satisfy federal officials.

Indeed, even if insurers exercise their rights of free speech and criticize government policy, they jeopardize their business. When the government controls the market, the government can exclude you from it, even for the First Amendment offense of offering an interpretation of economic reality that differs from the government’s official position.

Under Obamacare (Section 1311), states “shall” establish health insurance exchanges for the purchase of health plans, including new government-sponsored plans administered by the U.S. Office of Personnel Management (yes, there is a “public option”), the agency that runs the federal civil service. This is done in accordance with federal rules and guidelines. If states cannot or refuse to establish the health insurance exchanges, the Secretary of HHS will come into the state and do it for them. States are also required to expand Medicaid eligibility and, assuming continued state participation, state taxpayers will be forced to finance new Medicaid obligations.

Federal control is to be exercised through the regulatory power of existing federal departments, and also scores of new federal agencies, boards, commissions, councils, panels and programs.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.