“For the average American out there, for the 85 and 90 percent of Americans who already have health insurance, this thing’s already happened. And their only impact is that their insurance is stronger, better and more secure than it was before. Full stop. That’s it. They don’t have to worry about anything else.”
— President Obama, remarks at a news conference, April 30, 2013
During the president’s news conference on the 100th day of his second term, he rebutted suggestions that the implementation of the Affordable Care Act, a.k.a. “Obamacare,” in the coming year might face problems. He made the argument that most Americans — “the 85 to 90 percent of Americans who already have health insurance” — will not notice anything but better health care, such as coverage for children under the age of 26 and no restrictions because of preexisting conditions.
He added that the impact will be felt instead by “that small group of people — 10 to 15 percent of Americans; now, it’s still 30 million Americans, but relatively a narrow group — who don’t have health insurance right now or are on the individual market and are paying exorbitant amounts for coverage that isn’t that great.”
There’s a lot of numbers there. We have found in the past that the president has sometimes overhyped the potential benefits of the law — though much about the law’s impact remains uncertain and open to conjecture. Let’s take a deeper look.
The president is correct that a vast majority of Americans already have health insurance, and many get it through their employers. The Census Bureau (Table 8) says that as of 2011, 64 percent of Americans have a private health plan, with 55 percent getting it through their employer. Another 32 percent get health care through a government plan such as Medicare and Medicaid, while about 10 percent buy their own plans. (The numbers add up to more than 100 percent because people can be covered by more than one type of insurance in a year.)
Obama appears to be including Medicare, the program for retirees, in his figures, though the health care law is aimed mainly at people under the age of 65.
Obama, in his comments, suggested that only small segment of the population — those with no insurance or poor insurance — will have to worry about the impact of implementation. But there are a variety of studies and reports that suggest that, beyond those groups, some 10 million people face the prospect of losing their current health care.
According to the Congressional Budget Office’s most recent estimate, by 2018, after the law is fully implemented, 8 million people will be dropped from their employer health plans and 3 million people will shift out of private plans. The number of uninsured would drop by 27 million, while 10 million will be added to Medicaid and 27 million people will participate in health care exchanges. (The White House notes that the number of people overall receiving employer-provided health insurance will increase — and 92 percent of Americans will be insured.)
Not all of the people who shift out of private plans are currently in bad plans; some may simply be priced out of the market as rates increase. (We had explored this issue before.) For instance, Maryland’s biggest health insurer has proposed raising premiums for individual policies by an average of 25 percent next year, arguing that its costs will increase under the health care law.
Indeed, a University of Chicago study found that more than half of individual plans do not meet standards for minimum coverage under the law, and experts say many of those plans could disappear. CNN Money reported that 15 million Americans currently buy policies on the individual market.
Even unions, which were big supporters of the law, have grown wary because it may drive up costs for their health-care plans, according to the Wall Street Journal. The newspaper reported that some unions are seeking a change that would allow lower-paid members to get federal insurance subsidies while still remaining on the health care plan, though the administration has been lukewarm to the idea. “Some 20 million Americans are covered by the health-care plans at issue in labor’s push for subsidies,” the Journal said.
Meanwhile, while Obama said people already with health insurance “don’t have to worry about anything else,” there are other potential impacts from the law.
The Medicare actuary also has warned that the sharp reductions in payments to Medicare providers could force the closure or exit from Medicare of 15 percent of hospitals, skilled nursing facilities, and home health agencies by 2019 — and 40 percent by 2050. (Of course, that’s not sustainable and the actuary notes that “in practice, Congress would presumably act to adjust Medicare payment rates as necessary before such a situation developed.”)
There is also growing concern that employers will increasingly rely on part-time workers in order to avoid the law’s requirements, as explored in an interesting report from National Public Radio this week. Some experts, such as Moody’s economist Mark Zandi, have predicted that the health care law will have a negative impact on job creation as it is implemented.
The Pinocchio Test
The president’s general point is perhaps defensible — that a good percentage of people with employer-provided health insurance may not notice much difference. But he gets into trouble when he sweepingly suggests that only a “small group of people” — perhaps 30 million, including those with no health insurance — will feel an impact as the law is implemented.
The numbers mentioned above come from different sources, so they cannot be easily added. But by any reasonable measure the numbers are higher than the president suggested, especially when one considers the 20 million union members who face potential turmoil.
Obama acknowledged that “there will still be glitches and bumps” as the law is implemented, but that came after he airily suggested that 85 to 90 percent of Americans “don’t have to worry about anything else.” It would be better to forthrightly say the law is a massive undertaking and the consequences are still uncertain.
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