Trump’s claim relies on twisted logic

President Donald Trump often says that the health insurance exchanges for buying individual coverage are collapsing under their own weight. Recent reports from the Centers for Medicare and Medicaid Services provided him with another data point.

“2 million more people just dropped out of ObamaCare. It is in a death spiral,” he tweeted Tuesday.

We decided to look at that 2 million figure and see whether it adds weight to the argument that the Affordable Care Act exchanges are collapsing.

What we found isn’t nearly as convincing as Trump made it sound. It’s become routine for people to leave the health insurance exchanges in the first months of the year. It is often a signal they found insurance through an employer. The number this year is higher, experts say, primarily because of a change in when the federal government collected the data.

The government report

The 2 million figure comes from the Centers for Medicare and Medicaid Services’ snapshot of people who signed up for insurance on an exchange by the Jan. 31 deadline, but have not paid the premium to keep the policy active.

The report said that 10.3 million individuals had paid the premiums needed to have coverage in February. Compared to total sign-ups of 12.2 million, that was a drop of 1.9 million people, or about 15%.

First, that has happened in previous years.

In 2015, the Centers for Medicare and Medicaid Services examined who had paid through all of March and found that the number of enrollees fell from 11.7 million to 10.2 million, a drop of 1.5 million or about 13%. In 2016, the number fell from 12.7 million to 11.1 million, a drop of 1.6 million or again about 13%. (The 2015 enrollment deadline was different but the one for 2016 was the same as this year.)

In 2015 and 2016, Centers for Medicare and Medicaid Services looked at people who paid their premium through the end of March. And for good reason.

In nearly every state, people who buy coverage in the last two weeks of January are buying policies that don’t begin until March. That gives them more time to pay before the policy lapses.

In 2017, the Centers for Medicare and Medicaid Services looked at who made payments through March 15. That is two weeks shorter than the year before and out of step with the March 1 start date for many policies. We asked why the federal agency changed its reporting timeline and did not get an answer.

Why a change in method matters

The impact of the change could be significant.

The website ACASignups, a project of data activist Charles Gaba, tracks enrollment numbers across the country. Gaba reported that as of mid-January, 11.7 million people had signed up. That would leave about 500,000 people who purchased policies that would not kick in until March. The federal government, in its report, assumed every one of them didn’t pay their premium and dropped coverage. But we don’t know that to be the case.

The missing two weeks could make another difference. In a time when the unemployment rate has fallen, more people might have found work.

There are several reasons people don’t follow through and pay their premiums. Some don’t have the cash, or they turn 65 and get on Medicare. However, Melinda Buntin, professor of health policy at Vanderbilt University, said employment is a major reason.

“More than half, about 60%, of those who did drop coverage (after paying for at least one month) said they did so because they obtained employersponsored coverage,” Buntin said.

Based on a separate 2017 Centers for Medicare and Medicaid Services report, those who left due to a job outnumbered those who cited the high cost of premiums by a margin of more than four to one.

That study also said that insurance companies leaving the exchanges contributed to people dropping coverage.

That has been a growing problem in recent months, partly of Trump’s making.

“Efforts to repeal and replace the Affordable Care Act have exacerbated what was already a turbulent market,” said Timothy Callaghan, a professor of health policy at the Texas A&M School of Public Health. “This has caused some insurers to raise their prices and others to exit the market entirely.”

Death spiral?

Trump went on to say that people failing to pay their premiums is a sign of a death spiral.

As we have written before, there certainly are problems with the health exchanges created as part of the Affordable Care Act. For instance, in Iowa, insurers have threatened to pull out of the exchanges in 94 of the state’s 99 counties.

A death spiral is a specific term that described when healthy people leave the insurance market due to the cost. That leads to higher premiums for the people remaining in the insurance pools, who tend to be sicker, which causes enrollment to shrink even further, continuing the cycle until the entire system fails.

But the nonpartisan Congressional Budget Office said in March that the individual insurance market, which relies on the exchanges, would “probably be stable in most areas under either current law” or the proposed American Health Care Act.

Our rating

In a tweet, Trump linked 2 million people dropping coverage on the Obamacare exchanges to a “death spiral.” The figure is plucked out of context. The pattern of people signing up and then dropping coverage has been steady over the past few years. A reason people do so, experts and government data say, is because they find coverage someplace else, most often by getting a job.

Trump’s statement contains an element of truth but ignores critical facts that would give a different impression. We rate it Mostly False.