Most Americans don’t understand what a government subsidy is

Not exactly a shocking headline.  Surely less so than, most Americans don’t know that government is subsidizing their health care.  Actually, I suspect both are true, but I think the YouGov question this is based on (via Yglesias) is quite problematic:

“Do you receive [emphasis mine] a government subsidy to help you pay for your health insurance.”  My suspicion is that substantially more than 15% or so of American who receive employer health insurance no there’s a tax break involved, but don’t think a tax break as receiving a government subsidy.  I could be wrong, but I actually suspect you would have much higher responses to “is your health insurance in any way subsidized by the government.”  Of course, there’s really no excuse for all those 65+ on Medicare who just don’t get it.  So despite nit-picking the question wording, I do think Yglesias is right:

Some of what you see in this poll is a simple misunderstanding — older Americans either don’t know what Medicare is or mistakenly believe they have “paid for” their benefits with earlier taxes.

But Americans who get insurance from their jobs are also benefitting from a massive government program. A program whose existence is hidden from sight but is nonetheless quite real and substantial..

One of the few things that policy experts of all kinds can agree on is that it’s arbitrary and unfair to provide this subsidy to employees of large companies while other workers go unsubsidized and uncovered.

The Affordable Care Act seeks to address this unfairness by creating a parallel system of subsidies from people who don’t get job-based care while paring back the tax subsidy for the most expensive job-based plans.

Most conservative plans — from the one John McCain ran on in 2008 to the one Richard Burr, Orrin Hatch, and Fred Upton are pushing in the current congress — level the playing field by eliminating (in McCain’s case) or curtailing (in the current bill’s case) the subsidy for job-based plans. Avik Roy, a leading conservative health wonk, calls this subsidy the “original sin” of American health care policy.

But as far as the public is concerned, liberals and conservatives might as well be arguing about what to do with the Loch Ness Monster. A huge share of the American health policy debate is a debate about what to do about a subsidy that the public doesn’t realize exists.

Of course, one of the problems in making good policy in general is that it is far too easy to use Americans’ massive ignorance of how policy actually works (not that I’m blaming them) to mislead the public for political ends.  Death panels anyone?

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About Steve Greene
Professor of Political Science at NC State http://faculty.chass.ncsu.edu/shgreene

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