In error-laden Wash. Post op-ed, Feldstein falsely claims health care plan gives "no protection" to unemployed
In a July 28 Washington Post op-ed, Harvard University economics professor Martin Feldstein advanced several falsehoods, including his claim that President Obama's health care reform plan provides "no protection if [Americans] lose their current insurance because of unemployment"; his suggestion that a 5.4 percent surtax would be added to everyone in the 35 percent marginal tax bracket; and his claim that Obama supports a British-style health care system in which "the government owns the hospitals and the doctors are salaried."
Feldstein falsely asserts Obama health plan offers "no protection" to those who lose insurance
From Feldstein's Post op-ed :
For the 85 percent of Americans who already have health insurance, the Obama health plan is bad news. It means higher taxes, less health care and no protection if they lose their current insurance because of unemployment or early retirement.
Benefit 1: Those who lose their insurance will be able to buy a new policy despite pre-existing conditions
The current system contains barriers to coverage for people with pre-existing conditions. Currently, insurance companies can deny coverage , or offer coverage only at astronomical rates, to people with pre-existing conditions. Insurance companies also routinely restrict or deny coverage  by rescinding  health insurance policies on the grounds that people had undisclosed pre-existing conditions.
According to Obama, bills would eliminate these barriers. Obama: "Under each of these bills, you won't be denied coverage if you've got a preexisting medical condition. You won't lose your health care if you change jobs, if you lose your job, or if you start a business. And you won't lose your insurance if you get sick." [Remarks; 7/21/09 ]
Indeed, House Democrats' tri-committee health care reform bill bars insurers from using pre-existing conditions to deny coverage. According to a Ways and Means Committee staff description  of the House bill, section 111  "[p]rohibits the application of pre-existing condition exclusions," and section 112  "[r]equires guaranteed issue (no one can be denied health insurance) and renewal of insurance policies and prohibits the use of rescissions except in instances of fraud." From the description of the bill:
SEC. 111. PROHIBITING PRE-EXISTING CONDITION EXCLUSIONS.
A qualified health benefits plan may not impose any pre-existing condition exclusion (as defined in section 2701(b)(1)(A) of the Public Health Service Act) or otherwise impose any limit or condition on the coverage under the plan with respect to an individual or dependent based on any health status-related factors (as defined in section 2791(d)(9) of the Public Health Service Act) in relation to the individual or dependent.
SEC. 112. GUARANTEED ISSUE AND RENEWAL FOR INSURED PLANS.
The requirements of sections 2711 (other than subsections (c) and (e)) and 2712 (other than paragraphs (3), and (6) of subsection (b) and subsection (e)) of the Public Health Service Act, relating to guaranteed availability and renewability of health insurance coverage, shall apply to individuals and employers in all individual and group health insurance coverage, whether offered to individuals or employers through the Health Insurance Exchange, through any employment-based health plan, or otherwise, in the same manner as such sections apply to employers and health insurance coverage offered in the small group market, except that such section 2712(b)(1) shall apply only if, before nonrenewal or discontinuation of coverage, the issuer has provided the enrollee with notice of non-payment of premiums and there is a grace period during which the enrollees has an opportunity to correct such nonpayment. Rescissions of such coverage shall be prohibited except in cases of fraud as defined in sections 2712(b)(2) of such Act.
Section 2711  of the Public Health Service Act provides that -- with certain exceptions:
[E]ach health insurance issuer that offers health insurance coverage in the small group market in a State --
(A) must accept every small employer (as defined in section 300gg-91(e)(4) of this title) in the State that applies for such coverage; and
(B) must accept for enrollment under such coverage every eligible individual (as defined in paragraph (2)) who applies for enrollment during the period in which the individual first becomes eligible to enroll under the terms of the group health plan and may not place any restriction which is inconsistent with section 300gg-1 of this title on an eligible individual being a participant or beneficiary.
Section 2712  provides that -- with certain exceptions:
[A] group health plan, and a health insurance issuer offering group health insurance coverage in connection with a group health plan, may not establish rules for eligibility (including continued eligibility) of any individual to enroll under the terms of the plan based on any of the following health status-related factors in relation to the individual or a dependent of the individual:
(A) Health status.
(B) Medical condition (including both physical and mental illnesses).
(C) Claims experience.
(D) Receipt of health care.
(E) Medical history.
(F) Genetic information.
(G) Evidence of insurability (including conditions arising out of acts of domestic violence).
The Senate Health, Education, Labor, and Pensions (HELP) Committee bill also bars the use of pre-existing conditions to deny coverage. The bill states  that "[a] group health plan and a health insurance issuer offering group or individual health insurance coverage, may not establish rules for eligibility (including continued eligibility) of any individual to enroll under the terms of the plan or coverage based on any of the following health status-related factors in relation to the individual or a dependent of the individual:
''(1) Health status.
''(2) Medical condition (including both physical and mental illnesses).
''(3) Claims experience.
''(4) Receipt of health care.
''(5) Medical history.
''(6) Genetic information.
''(7) Evidence of insurability (including conditions arising out of acts of domestic violence).
''(9) Any other health status-related factor determined appropriate by the Secretary."
The House bill provides  "individual affordability credits" through a Health Insurance Exchange to certain individuals. The criteria  for which individuals are eligible for these credits are as follows:
(A) who is enrolled under an Exchange-participating health benefits plan and is not enrolled under such plan as an employee (or dependent of an employee) through an employer qualified health benefits plan that meets the requirements of section 312;
(B) with family income below 400 percent of the Federal poverty level for a family of the size involved; and
(C) who is not a Medicaid eligible individual, other than an individual described in section 202(d)(3) or an individual during a transition period under section 202(d)(4)(B)(ii).
Support for Affordable Health Coverage. To reduce the economic burden of health care on vulnerable Americans, low-income, and moderate-income Americans who enroll in plans through the Gateways will be eligible for premium credits. Credits are provided on sliding scale, so that those with the lowest incomes receive the most help. Gateways, which will provide information on health insurance options, will administer these credits. The premium credits would be on a sliding scale up to 400% of the poverty line ($88,080 for a family of 4), with those at lower end receiving more. (§ 3111)
Feldstein falsely suggested surcharge would apply to all taxpayers in 35 percent tax bracket
From Feldstein's op-ed :
Although the president claims he can finance the enormous increase in costs by raising taxes only on high-income individuals, tax experts know that this won't work. Experience shows that raising the top income-tax rate from 35 percent today to more than 45 percent -- the effect of adding the proposed health surcharge to the increase resulting from letting the Bush tax cuts expire for high-income taxpayers -- would change the behavior of high-income individuals in ways that would shrink their taxable incomes and therefore produce less revenue. The result would be larger deficits and higher taxes on the middle class. Because of the unprecedented deficits forecast for the next decade, this is definitely not a time to start a major new spending program.
Top surcharge of 5.4 percent applies to families earning $1 million or more. Contrary to Feldstein's suggestion that the surcharge provided in the House bill would apply to all taxpayers in the 35 percent tax bracket, the 35 percent tax bracket applies  to income in excess of $372,950 while the top surcharge  of 5.4 percent -- which Feldstein includes in his calculation of a 45 percent top marginal rate -- applies to income greater than $1 million for tax payers filing joint returns, $500,000 for married individual filings, and $800,000 for other filings. The legislation would also establish  a 1 percent tax on taxpayers filing joint returns with income exceeding $350,000 but not exceeding $500,000 per year, and a 1.5 percent tax on income exceeding $500,000 but not exceeding $1 million per year.
Feldstein falsely claimed that "Obama has said that he would favor a British-style 'single payer' system"
From Feldstein's op-ed :
Obama has said that he would favor a British-style "single payer" system in which the government owns the hospitals and the doctors are salaried but that he recognizes that such a shift would be too disruptive to the health-care industry. The Obama plan to have a government insurance provider that can undercut the premiums charged by private insurers would undoubtedly speed the arrival of such a single-payer plan. It is hard to think of any other reason for the administration to want a government insurer when there is already a very competitive private insurance market that could be made more so by removing government restrictions on interstate competition.
Britain has a socialized medicine system, which is not a single-payer system. As Pulitzer Prize-winning economist Paul Krugman  explained in a July 28 post to his New York Times blog critiquing Feldstein's op-ed, single payer "means a system like Medicare, in which the government pays the bills. It absolutely does not mean a British-style system -- and Obama definitely didn't advocate anything of the sort." Also criticizing Feldstein's piece, The New Republic's Jonathan Chait  similarly pointed out in a July 28 post to TNR's The Treatment blog, "Britain does not have a single-payer system. It has a socialized system, where the government directly employs all health care providers. ... Does Medicare own hospitals and pay doctors government salaries? No."
Obama has not said he supports a socialized medicine system like the one in Britain. Feldstein purported to show that Obama supports a "British-style 'single payer' system" by linking to an August 19, 2008, Wall Street Journal Washington Wire blog post , which quotes then-presidential candidate Obama saying: "If I were designing a system from scratch, I would probably go ahead with a single-payer system" [emphasis added]. Indeed, Feldstein's purported evidence undermines his claim.