Supreme Court ruling on the Affordable Care Act launches a raft of fluffernutter
Moments after the Supreme Court upheld a key provision of the Affordable Care Act, a.k.a. Obamacare, our inbox began to be flooded with statements from politicians either condemning or praising the 6-to-3 ruling. These e-mails were then followed by queries from readers asking for an explanation of the figures spouted in those statements.
Here’s a guide to some of the rhetoric, much of which we have covered in the past. As is our practice with such round-ups, we do not award Pinocchios.
Bush got these numbers from a recently released Congressional Budget Office report that looked at the impact of repealing the law.
The CBO estimated that from 2016 to 2025, the law would require $1.7 trillion in outlays (spending) while raising revenue (taxes) of $1.2 trillion. But the CBO also calculated that the law pays for itself— and reduces the federal deficit over the 10-year period— because the taxes, $800 billion in savings from Medicare and other provisions exceed the $1.7 trillion price tag.
All told, the lawis projected to reduce the deficit by more than $350 billion— something that Bush does not mention.
Boehner emphasizes increased health costs, a claim also asserted by Bush. But there are manyways either side can spin this.
Obviously, the cost of health care generally goes up every year, though the rate of increase has slowed dramatically in recent years. Democrats stress this, but at this point it’s hard to give most of the credit to the health-care law. (We once gave President Obama Three Pinocchios for making this claim too emphatically.)
At the same time, Republicans are being disingenuous for assuming the lawwas going to result in an actual decrease in costs. In their defense, they point to Pinocchio-laden statements made by Obama during the 2008 presidential campaign, which we will explore below.
In this quote, Perry is relying on one very stale talking point and one exaggerated one.
The “nearly 5 million people losing their health plans” comes from an Associated Press count in 2013 of the number of people who received notifications that their old policies were no longer valid under the law because they did not meet certain standards. (Recall that Obama had famously— and falsely — promised that if people liked their plans, they could keep them.)
Other estimates of the number of affected people were lower. Moreover, a large percentage of the people whose old plans were canceled were automatically moved to newplans offered by the same insurance companies.
On top of that, the White House ordered an administrative fix that, depending on the actions of individual states, allowed as many as 2.3 million people with “canceled plans” to simply stay on their old plans for at least another year. (Then the White House extended that deadline to 2016.) The administration also announced a new catastrophic exemption to fill any remaining gaps in coverage— estimated to affect as many as 500,000 people.
So the number of people “losing a plan” is far less than 5 million.
As for premium increases of more than 50 percent, Perry is relying on a conservative analysis of the individual market that compares pre-law plans with fewer benefits to current law plans. The Kaiser Family Foundation in June released an early analysis of plans in 10 states plus the District of Columbia and found that, on average, the cost of a benchmark silver plan would be 4.4 percent higher in 2016.
That’s about a 10th of the figure touted by Perry. Moreover, it is worth recalling that before 2010, when the lawwas approved by Congress, premium increases in the individual market were about 10 percent each year.
This is an apples and oranges comparison, combined with a mischaracterization.
Obama in 2008 said that a health-care overhaul would result in family savings of $2,500, compared with anticipated increases in premiums. In other words, he was not promising a cut in premiums, as Cruz claimed. Still, it was a foolish pledge, for which Obama received Two Pinocchios because it was based on a series of shaky assumptions.
After the Affordable Care Act was implemented, the White House amended the pledge to a savings of $2,000 by 2019.
In the meantime, the average premium for employersponsored plans has increased by about $3,000 from 2010 to 2014, according to the Kaiser Family Foundation. But that’s a goodnews story, because the rate of increase in premiums has slowed significantly.
We have previously provided a lengthy explanation of this $1,800 figure, which is derived from the same Kaiser study from which Cruz obtained his “$3,000” figure. But in this case the White House focused on what premiums would have been if they had continued on the same path of premium growth from 2000 to 2010.
When we examined this in depth, the president earned Two Pinocchios for two key reasons. First, he had called it a “tax cut” of $1,800, when it’s unclear how much of this money ends up in an employee’s pocket. The “you’re still paying” language has the same problem. For all one knows, employers are pocketing the savings.
Moreover, Obama appears to be attributing the entire slowdown in cost increases to the Affordable Care Act— and the jury is still out on that. The slowdown in health-care costs has to be viewed in context— as the economic growth and price inflation in general was lower in the aftermath of the Great Recession. (Health-care costs slowed around the globe, even in countries with no changes in health-care laws.)
Thus, attributing the full $1,800 in savings to the lawis a stretch.
“This fatally flawed law imposes jobkilling mandates, causes spending in Washington to skyrocket by $1.7 trillion, raises taxes by $1 trillion and drives up healthcare costs.”
— Former Florida governor Jeb Bush (R)
“Obamacare is fundamentally broken, increasing healthcare costs for millions of Americans.”
— House Speaker John A. Boehner (R-Ohio)
“With individual premiums up more than 50 percent and nearly 5 million people losing their health plans, Americans deserve better than what we’re getting with Obamacare.”
— Former Texas governor Rick Perry (R)
“President Obama promised the average family’s health insurance premiums would drop $2,500 under Obamacare. In actuality, the average family’s premiums have risen $3,000.”
— Sen. Ted Cruz (R-Tex.)
“If your family gets insurance through your job— so you’re not using the Affordable Care Act— you’re still paying about $1,800 less per year on average than you would be if we hadn’t done anything.”
— President Obama