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‘Obamacare’ and rising health insurance premiums

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“Six in 10 Americans are seeing their [health insurance] premiums rise. The average cost of a family policy is up $1,300. Another part of President Obama’s health care takeover will cost $111 billion more than promised.”

--Voiceover in a Republican National Committee TV ad about the Obama health care law

Be wary of the single data point, exploited either by Democrats or Republicans.

This new RNC ad slams the Obama health care law for already causing a boost in health care premiums, even though much of the law has not been implemented. (The ad frames this as breaking President Obama’s already dubious promise that the health care overhaul will result in average family premiums declining by $2,500.)

The ad, repeating the myth that the law is a “health care takeover,” also asserts that costs in one part of the the health care law are soaring, a claim we have debunked before.

The Facts

The RNC based its claims about premiums on the 2011 Kaiser Family Foundation annual survey of employer health benefits. We laughed out loud when we saw that, since it was only a year ago, on the first anniversary of passage of the law, that Democrats were citing the 2010 survey to make an equally absurd claim about the health care law.

Democrats said the survey showed that the percentage of very small businesses offering health care to their employers had soared because of the law. We gave that claim Three Pinocchios because it turned out that the survey was conducted before the law had even passed.

Democrats aren’t making this claim anymore because the 2011 version of the survey shows that the percentage of small businesses offering health care had fallen back to the level of 2009. What happened in 2010? “These figures suggest that the 2010 results may be an aberration,” the Kaiser survey said.

As we said, be wary of a single data point.

Now, the RNC makes the same mistake in focusing on the increase in health care premiums. The Kaiser survey does not suggest that the premium increase has much to do with the health care law; indeed, it notes that “many of the most significant provisions of the Patient Protection and Affordable Care Act (ACA) will take effect in 2014.”

The provisions that have taken effect, such as providing coverage for adult children up to age 26, thus far appear to have had modest impact on premiums. Kaiser says it will monitor the impact on employers but it generally places the year-to-year increase as part of an overall trend of sharply rising costs. “Since 2001, average premiums for family coverage have increased 113 percent,” the report notes.

Indeed, when Kaiser looked at just the increase in the portion of the premium that workers contribute, the report said that neither the amounts for families nor individuals represented “a statistically significant increase over the 2010 values.”

“One of President Obama’s most fundamental promises if Obamacare passed was that premiums would come down $2,500,” responded Joe Pounder, spokesman for the RNC. “That has not happened. Indeed, premiums are on the rise and Obamacare is helping to fuel the increase. Obama used this talking point to sell his health care plan and the American people have a right to expect results, not more talking points that one day down the road Obamacare may or may not fulfill one or none of the promises he made.”

The ad also claims that the health care law will cost $111 billion more over 10 years than promised. The citation in the ad is an Associated Press article, which was based on a claim by a Republican lawmaker that the estimated cost of helping Americans buy insurance had jumped.

But as we documented before, there is much less to this claim than meets the eye. Republicans mixed up White House budget estimates with Congressional Budget Office estimates—and also failed to look at the other side of the budget ledger. The same legislation that increased the cost of tax credits reduced the number of people who would qualify for Medicaid under the law. Taken together, the cost of this particular segment of the health care bill actually declines slightly over 10 years.

“There have been a series of well-documented ‘glitches’ from Obamacare that have required fixes and legislative repeals,” Pounder said. “This is one reported on by numerous media outlets.”

The Pinocchio Test

We offer no defense of Obama’s claim that his health care law will reduce premiums by $2,500. (There was an asterisk to that claim—he was talking about what premiums would have been in 2016 absent the law, not an actual dollar decline from current rates.) He will have to answer to Americans if his law fails to live up to that pledge, or if people feel misled by his careful wording.

But that’s no excuse for the RNC to cherry pick a single year of data out of the Kaiser report and suggest the law, which largely has not gone into effect, is already responsible for a rise in premiums. They are making the same mistake Democrats made last year when they plucked a one-year number out of the same report—which now turns out to be a statistical fluke.

The Democrats got Three Pinocchios last year, and so does the RNC now.

Three Pinocchios




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