4 Pinocchios for Romney’s claim on an Obama health care pledge
“Promise: President Obama promised to lower annual health insurance premiums by $2,500…Result: Annual health insurance premiums have increased by $2,393....Gap: health premium costs are $4,893 higher per family than President Obama promised.”
— new Facebook/Twitter post by the Romney campaign
Promises made during the heat of an election campaign sometimes come back to haunt politicians.
The campaign of former Massachusetts governor Mitt Romney is trying to nail President Obama for making an iffy promise during the 2008 campaign — that premiums will be $2,500 lower under his health care plan. Instead, the Romney campaign argues in an effort to create a viral Facebook post, the swing has gone $4,893 the other way.
The Romney graphic is false on several levels, though Obama certainly left himself open to scrutiny with imprecise language in the 2008 campaign. Let’s take a look.
The Romney campaign cites a statement from a 2007 speech by Obama, but it’s a pledge that was repeated often: “When I am president, we will have universal health care in this country by the end of my first term in office. It's a plan that will cover every American and cut the cost of a typical family's premiums by $2,500 a year.”
This particular quote is not very clear on when the savings would be realized, but in another speech, in 2008, Obama suggested it would be at the end of his first term — though to be fair, it is not clear if he is talking about the savings or enacting a new health care law:
“In an Obama administration, we’ll lower premiums by up to $2,500 for a typical family per year. And we'll do it by investing in disease prevention, not just disease management; by investing in a paperless health care system to reduce administrative costs; and by covering every single American and making sure that they can take their health care with them if they lose their job. We'll also reduce costs for business and their workers by picking up the tab for some of the most expensive illnesses. And we won't do all this twenty years from now, or ten years from now. We'll do it by the end of my first term as President of the United States.”
The details of this number were further explained in an Obama campaign memo:
“Combining all of these effects — from improved health IT [information technology], better disease management, reduced insurance overhead, reinsurance, and reduced uncompensated care — under our “best-guess” assumptions, we estimate that businesses will save $140 billion annually in insurance premiums. The typical family will save $2500 per year.”
But note that Obama’s pledge came with an asterisk: He was not saying premiums would fall by that amount, as the Romney graphic asserts, but that costs would be that much lower than anticipated. In other words, if premiums were expected to rise by $5,000, they would only rise by $2,500 — that’s what Obama’s pledge meant, even if he was not too clear about it.
Michael Dobbs, our predecessor as The Fact Checker, awarded Obama Two Pinocchios for the pledge, saying it was based on shaky assumptions (such as a Rand Corp. study that was criticized by the Congressional Budget Office) and there was no guarantee that any savings would be passed on to consumers. Our colleagues at FactCheck.org also thought Obama’s pledge was highly dubious.
Of course, once Obama became president, the health care proposal he advocated as a candidate was significantly changed, even to the point of accepting the individual mandate that he had so criticized when Hillary Rodham Clinton promoted it. But the White House more or less stuck to the idea that costs would not rise as quickly as previously estimated — except that it would result in $2,000 in savings by 2019. (Recall also that the health care law will not be implemented until 2014, making a first-term pledge problematic.)
Now, let’s look at what the Romney campaign has done with the pledge. First, it assumes that Obama was saying that premiums would actually decline by $2,500, rather than decline from a projected increase. Then, it takes the 2011 Kaiser Family Foundation survey estimate (Exhibit 1.11) and subtracts the cost of a 2008 family premium ($12,680) from the cost of a 2011 premium ($15,073). Viola, an increase of $2,393—and a promise gap of $4,893.
The Romney campaign’s math is nonsensical. First of all, the Kaiser survey is conducted from January to May each year, so starting with the 2008 date makes little sense, since that is still George W. Bush’s term. Then the health care law was not passed until 2010, so the first year in which any impact could be seen from the law was in 2011.
But, as the Kaiser report notes, most of the provisions of the new law will not take effect in 2014. Thus far, other provisions, such as providing coverage for adult children up to age 26, appear to have had a modest impact on premiums--perhaps 1 to 2 percentage points. (The White House disputes even that effect.) Still, the full effect on premiums — including any possible savings — will not be seen until the law is completely implemented.
We had previously given the Republican National Committee Three Pinocchios for an ad that had focused on the single data point — the increase in premiums from 2010 to 2011 — and blamed all of the increase on the health care law. Now the Romney campaign has quadrupled the same error in an effort to claim that “health premium costs are $4,893 higher per family than President Obama promised.”
The Pinocchio Test
Obama in 2008 made a foolish, dubious pledge about health care premiums. As we have noted, he will have to answer to Americans if his law fails to live up to that promise by 2019 or if people feel misled by his lawyerly wording. He was warned when he got Two Pinocchios back in 2008.
But two wrongs don’t make a right. The Romney campaign has twisted the meaning of that pledge, and then blamed a partially implemented, one-year-old law for three years of premium increases, in order to concoct an absurd claim.
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