(AP Photo/Scott Morgan)

“You know, there’s a strange trade-off at the heart of Obamacare. There were roughly 45 million people who were uninsured. Obamacare is endeavoring to insure about a third of them, somewhere between 15 and 20 million people. Even fully implemented, there’ll be about 30 million people that don’t get health insurance. Now, look, there are a lot of people that would like to see more of the uninsured be able to get health insurance. But the trade-off behind Obamacare is to extend to that 15 or 20 million people, they are jeopardizing the health insurance of some 200 million Americans who get health insurance in the private health insurance market.”

–Sen. Ted Cruz (R-Tex.), appearing in Fox News’ Sean Hannity Show, Nov. 20, 2013

Cruz’s math in this interview was quite unlike any figures The Fact Checker had heard or seen before, so let’s explore how the senator came up with his numbers. Under Cruz’s calculations, 200 million people are at risk of losing their insurance in order to benefit just 15 to 20 million people—while leaving 30 million uninsured.

The Facts

The Congressional Budget Office earlier this year calculated that by 2023, 31 million people will still lack health insurance even after the implementation of the Affordable Care Act. The figure includes both undocumented immigrants and also people who are eligible for Medicaid but did not sign up, so it’s impossible to get it completely to zero.

However, when the law passed, CBO’s original score said that 23 million would lack health insurance by 2021. Why the difference? In 2012, the Supreme Court ruled, 7-2, that the federal government could not force states to expand Medicaid, and so many Republican-leaning states have refused to do so.

A case could be made that, when looking at the “trade-off at the heart of Obamacare,” you really should look at the original score, since that shows what the president was attempting to achieve. But Cruz clearly appeared to be citing the more recent CBO estimate.

Looking at the same CBO scores, we see that the nonpartisan agency estimated that the number of uninsured would drop 34 million (original score) or 25 million (2013 score). So how does Cruz come up with just 15 to 20 million?

Cruz spokeswoman Catherine Frazier explained that “the senator was using numbers before Obamacare was implemented and comparing to the future projection.”  She said he used a U.S. Census figure for the number of uninsured in 2008-2009 (45 to 49 million) and then compared that to the 31 million in the more CBO estimate. Presto, he ends up with a decrease of 14 to 18 million people.

Clearly, Cruz was never trained as a social scientist. He’s comparing two different ways of measuring the number of the uninsured—and reaching all the way back to 2008 to grab a relatively low number of the uninsured. The CBO estimate, by contrast, seeks to compare the results of the law with estimates of what would have happened to the number of uninsured if no law had passed. That’s the proper way to make a comparison, or otherwise your numbers get polluted by factors such as normal population growth.

Frazier defended Cruz’s calculations. “That is the right comparison because the point is about the state of things at the time Obama was proposing Obamacare and his promise about how things would change if enacted,” she said.  “Using the 2013 number doesn’t make sense as a starting point because it was a date three years into the future and three years after passage of Obamacare.  And the fact that the uninsured have increased under the Obama Administration is but another example of this president’s failed policies.”

She noted that during a news conference in 2009 Obama referred to “ the 47 million Americans who don’t have any health insurance at all.”

Alternatively, Frazier said, taking the 2011 figure from the March 2011 CBO and comparing it to the 2023 projection in the May 2013 CBO, you end up with a reduction of  21 million in the uninsured, close to Cruz’s initial estimate. Using the 2011 forecast would seem to require acknowledging the initial estimate in that report—a reduction of 34 million. But Frazier disagrees, saying it “was  based on policy declared unconstitutional so it’s a moot point.”

Meanwhile, what of Cruz’s estimate that the health insurance of 200 million people is jeopardized? How is that calculated? “We learn new things every day about how this law is impacting Americans, there is no telling who will or won’t get to keep their plans or face higher premiums,” Frazier said.

Cruz said he was talking about people getting health insurance in the private market. The CBO says that this year a total of 181 million people got their insurance either through their employer or the nongroup market. Most –156 million—get insurance through an employer. Other estimates put a number of Americans with private insurance a bit higher—about 189 million.

In other words, Cruz is assuming every single American with health insurance—and then some—is in jeopardy of losing his or her insurance. This is much higher than the most negative assessments of critics of the law. For instance, Christopher J. Conover, of Duke University, calculates that 129 million people are at risk of losing their insurance, or about 68 percent in the private market.

A number of readers have asked The Fact Checker about Conover’s estimate, which is based largely on the government’s estimate of the number of plans that will lose their grandfathered status. But for many workers, especially those at larger firms that self-insure their plans, a loss of grandfather status likely will not be noticed, experts say. Indeed, 94 percent of the workers in firms with more than 5,000 employers are in partially or fully self-funded plans. (See Exhibit 10.1)

“You’re right that the degree of constriction on individual freedom is less for workers in self-insured plans than their fully insured counterparts but I’m not inclined to just round that to zero and call it ‘no big deal,’” Conover said. “Freedom matters and so do promises.” He argues that many employers are expecting to impose premium increases because of mandates in the law, with one in seven predicting increases of more than 10 percent.  Moreover, he said that even self-insured plans offered by large employers are subject to some mandates that he says will change the nature of the plans.

But Larry Levitt, senior vice president at the Kaiser Family Foundation, says that “losing grandfathered status doesn’t equal cancellation. Employer plans can simply amend their terms to satisfy the new rules.” Most employer plans come very close to meeting the new rules anyway, he said, and “in the large employer market, there are not a lot of new rules to begin with.”

In some ways, this is a question of definitions: Where does one draw the line in terms of the effect on employees? We can’t settle that now, except to say that Cruz’s estimate that literally everyone is at risk appears to go too far.

“The point is that Obamacare promised to insure a large portion of the uninsured while those with insurance would be able to keep it,” Frazier said. “That promise has been broken. Now Americans who already had plans in the private market have no guarantee if they will be able to keep those plans.”

The Pinocchio Test

Cruz has this habit of speaking with certitude about numbers that turn out to be squishy. To make his rhetorical point, there was little need to lowball the number of uninsured who will get health care or overestimate the number of Americans who might be affected.

In other words, he could have said that 25 million Americans might get insurance, while as many as 128 million might experience changes in their plans that they don’t like. Instead, he seeks to exaggerate, saying the law only reduces the number of uninsured by one third. Actually, it’s a drop of 45 percent.

Moreover, by pegging this as part of the “trade-off  at the heart of Obamacare,” he is ignoring the fact that the law, as crafted, was intended to cover many more of the uninsured—including in his state of Texas, which has rejected the Medicaid expansion. (The experience in Kentucky, which unlike Texas accepted the Medicaid expansion, is an interesting test case, as documented by our colleague Stephanie McCrummen.)

Originally, the law intended to reduce the number of uninsured by 60 percent—double the rate asserted by Cruz.

Three Pinocchios


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