Senator Mary Landrieu Proposes Government Takeover of Insurance Industry

November 07, 2013

That would have been a more appropriate headline to a NYT article discussing politicians’ reactions to the troubles facing Obamacare. The piece notes several Democrats expressing concern about the program’s rollout. At one point it refers to Senator Landrieu’s proposed bill which would, “force insurance companies to reissue the health plans they have been canceling by the thousands.”

Such legislation would imply that insurers had to issue plans even if they were losing money on them, for example if the plans were unable to compete with insurance available in the exchanges. This would be an extraordinary intervention in the insurance market. It would have been more appropriate to highlight this extreme action by a senior senator than the actual headline of the piece “despite fumbles, Obama defends health care law.”

Presumably Senator Landrieu does not expect this bill to be taken seriously as legislation and is just introducing it for political purposes. (Copies of the text are not currently available on the web.) However it is not the NYT’s job to assist Landrieu in such political theater.

The article attempts to make the case that the Affordable Care Act is posing a serious problem for Democratic politicians, most importantly by leading to a less than expected victory margin for Terry McAuliffe in the gubernatorial race in Virginia. The evidence for this effect is at best ambiguous. It tells readers that 27 percent of voters identified health care as the most important issue. These people voted for Mr. McAulifie’s opponent by a margin of 49-45. However the same polls found that 45 percent identified the economy as the most important issue. This group broke for the Republican candidate by the same margin. In short, there is not much evidence that the problems with Obamacare played a major role in the Virginia gubernatorial race and there is even less reason to believe that the problems to date will affect the elections in November of 2014.

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