In an epic Princeton v. Harvard battle, Greg Mankiw comes out on top of Paul Krugman.
Here is the Krugman lead from his Jan 29 column:
Rising inequality has obvious economic costs: stagnant wages despite rising productivity, rising debt that makes us more vulnerable to financial crisis. It also has big social and human costs. There is, for example, strong evidence that high inequality leads to worse health and higher mortality.
High inequality leads to higher mortality? Prof. Mankiw encourages everyone (especially Prof. Krugman) to read the link Krugman provided, which includes this punchline:
There are now also a large number of individual level studies exploring the health consequences of ambient income inequality and none of these provide any convincing evidence that inequality is a health hazard. Indeed, the only robust correlations appear to be those among U.S. cities and states (discussed above) which, as we have seen, vanish once we control for racial composition.
We know Prof. Krugman will want to address this.
And while we wait, we hope he will pick up on the opportunity to clarify, amply and correct his blog comments following the Republican response to the State of the Union. In the course of noting a possible exaggeration by Ms. McMorris-Rodgers he said this about ObamaCare:
I’d be interested, by the way, to know the details about the constituent described in the official GOP response, who supposedly faced a $700 a month rise in premiums. What kind of plan did she have? Did that number include subsidies? The ACA is supposed to keep health costs to 8 percent of income, so the only way you could get numbers like that is if the individual (a) had a really bare-bones policy offering hardly any protection and (b) has an income well over $100,000.
The details of the constituent cited are now out. and Ms. McMorris-Rodgers should have been talking about a premium spike of $500/month, not $700.
Meanwhile, Krugman might want to keep in mind that subsidies disappear at $46,000 for an "individual" and $94,200 for two adults; that is hardly "an income well over $100,000".
And of course, the subsidies are meant to bring the total premium cost down to around 8% of income; after deductibles and co-pays kick in, good luck. His statement that "The ACA is supposed to keep health costs to 8 percent of income" is misinformed or deceptive.
We are confident that Prof. Krugman will be nothing these problems with alacrity and grace, based on his recent exhortation to Bret Stephens of the WSJ:
Instead, he points to an online post he put out admitting, with a minimum of grace, that using nominal incomes was wrong.
Sorry, but that’s not what I — or, if I may speak for my employer, The New York Times — calls a correction.
What, after all, is the purpose of a correction? If you’ve misinformed your readers, the first order of business is to stop misinforming them; the second, so far as possible, to let those who already got the misinformation know that they were misinformed. So you fix the error in the online version of the article, including an acknowledgement of the error; and you put another acknowledgement of the error in a prominent place, so that those who read it the first time are alerted. In the case of Times columnists, this means an embarrassing but necessary statement at the end of your next column.
My breath is unheld.
DECLARE VICTORY AND MOVE ON: In a new post Krugman explains that he was right.
Well, now we know, and I was right: her previous plan was catastrophic coverage only, with a $10,000 deductible — and the “$700 a month more” was the most expensive option offered by her insurer. She didn’t go to the healthcare.gov website, where she could have found cheaper plans.
So this wasn’t sticker shock, at least as described. This was someone finding out that the ACA requires that you have a minimum level of insurance, and that minimalist plans are no longer allowed — and it was also Ms. Rodgers misrepresenting what had happened.
Oh, and why isn’t catastrophic coverage only allowed? For the same reason we have a coverage mandate in the first place: everyone has to be in the risk pool.
Hmm - as to that $10,000 deductible being out-of-bounds, in Covered California I can find Bronze plans with a $10,000 deductible (Anthem Bronze 60 EPO, 2 adults age 58, $927/mo). In My Blue Heaven of Connecticut, Bronze plans with a $12,600 deductible are on offer (Anthem Bronze DirectAccess w/HSA - cdeh, 2 58 yr old adults, $1181/mo.) That said, the max deductible I found in Washington was around $6,000.
I am not so sure Krugman was "right" that $10,000 is automatically a catastrophic, non-compliant plan.