“The deal that has been cut provides no relief to the millions of Americans who are hurting because of Obamacare…. People all over this country are losing their health insurance. Fifteen thousand UPS employees got a notification in the mail that they were losing spousal coverage, that their husbands and wives were all losing the health insurance that they wanted and they liked. That is happening all over the country.”
— Cruz, remarks to reporters, Oct. 16, 2013
In the wake of the defeat of his effort to derail the Affordable Care Act, a.k.a. Obamacare, Sen. Ted Cruz (R-Tex.) continues to make assertions about the law that have puzzled and concerned readers. But it’s hard to know where to begin, as he repeatedly uses language that sketches the law in apocalyptic terms, even though the law has barely begun to be implemented. So we will focus on a few key items.
First of all, the United States is a big country — nearly 315 million people, in fact. So when a politician tosses out the claim that “millions of Americans” are hurting, it’s time to take out a calculator. Even 10 million would be a relatively small percentage.
The Congressional Budget Office has calculated that by 2018, after the law is fully implemented, 7 million people will be dropped from their employer health plans and 5 million people will shift out of private plans. Put in terms of percentages, that means it would affect about 4 percent of people on employer health plans and 19 percent on people on private plans.
Meanwhile, the number of people without insurance will decrease by 25 million people, a cut of more than 45 percent. In other words, significantly more people will be helped by the law than those who face changes in health coverage. Moreover, the vast majority of people who now get their insurance from their employers likely will see little change.
Those are crucial details that Cruz somehow ignores when he speaks of the millions of victims. Indeed, Oregon announced this week that the state’s uninsured rate has already been cut by 10 percent since Oct. 1, when people were able to begin signing up for Obamacare.
Cruz’s office, in defending the use of the term millions, provided a link to an article that says there will be higher drug prescription premiums in Medicare Part D next year. But here’s the flip side: The law closes by 2020 the gap in coverage known as the “doughnut hole,” which was long an irritant to some seniors.
In his ABC News interview, Cruz also makes wide claims about people who he says have lost jobs, faced premium hikes or been placed on part-time work. There is not enough data yet to make a judgment, pro or con, about such assertions. Although there are anecdotes here and there, little of that data adds up to a real trend. We encountered this issue when we examined the case of the City of Long Beach amid reports that it was shifting 1,600 workers to part-time because of the health-care law. The initial reports were overstated. (Cruz’s office supplied a link to a list of more than 350 employers who have cut hours or jobs, purportedly because of the law.)
Still, one would expect the law to have some impact, especially at the margins. As of 2015, companies with more than 50 full-time workers must provide health insurance to all workers or face a $2,000 per person penalty, after the first 30 full-time employees. There also is a separate targeted penalty of $3,000 per employee if the employer coverage is inadequate or unaffordable, though it can’t exceed the first penalty. Moreover, a full-time job is defined as just 30 hours per week.
The majority of firms with more than 50 employees — about 96 percent — already offer health-care coverage, but not necessarily to all employees. By one estimate, derived from Employee Benefits Research Institute data by an Obamacare critic, 46 percent of the nation’s uninsured workers are employed by large firms.
As for claims of premium hikes — or declines — it is best to take a jaundiced view of any such claims. As we have explained in an earlier column, the law mandates a robust package of benefits and requires that the amount an older individual pays will be no more than three times what a younger individual pays.
So some people, such as a young male who currently has a plan that does not include all of the required benefits, will have sticker shock; an article in the journal Health Affairs concluded that “more than half of Americans who had individual insurance in 2010 were enrolled in plans that would not qualify as providing essential coverage under the rules of the exchanges in 2014.” (This infographic explains the trade-offs well.)
People who had bare-bones plans that no longer will be available thus might discover raw costs are higher, though the benefits might be better. Nevertheless, the new rates could be a surprise. (Here’s a link to a personal tale from someone whose old plan was discontinued and saw his rates double.) Meanwhile, older, less healthy people likely will see premiums decrease.
On top of that, lower-income Americans will qualify for premium subsidies, which did not exist before. The law has also exposed wide variations in the cost of premiums even within a state.
So apples-to-apples comparisons on premium prices may not be possible at this point. The evidence supplied by Cruz’s staff mostly came from groups hostile to the law, and we prefer to rely on less biased sources. It’s fair to say that readers should remain skeptical of claims concerning premiums from partisans on both sides of this debate.
In the specific example cited by Cruz of UPS — “15,000 UPS employees got a notification in the mail that they were losing spousal coverage” — he left out a crucial detail: The company’s policy change affects spouses who would qualify for health coverage at their own company — affecting approximately one in five workers, according to a company memo. Spouses who don’t have coverage or are not employed would still continue on the company plan.
The company memo makes clear this action is being taken because of the health-care law, but UPS is not leaving spouses without health coverage or forcing them to go to the Obamacare exchanges. Cruz does not quite say that, but he certainly leaves that impression when he says workers are “losing the health insurance that they wanted and they liked.”
The Pinocchio Test
The full impact of the health-care law will not be known for years, and there are bound to be winners and losers in any major change in social policy. By focusing just on the losers, in such stark terms, Cruz undercuts his ability to highlight what he considers the flaws in Obamacare.
Taken together, are these claims worth Two or Three Pinocchios? It’s a fine line, and there are days when we wish we awarded ½ Pinocchios. On balance, Cruz’s language tips ever so slightly in the direction of Two Pinocchios. It may well be that “millions” have faced higher premiums or fewer hours at work, giving his claims a measure of credibility. But he does not allow at all for the possibility that millions of people are benefiting from the law — and that quite likely the number of winners from the law is larger than the losers. That does a disservice to his listeners.
Check out our candidate Pinocchio Tracker