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Fact checking the Obamacare rhetoric, pro and con

(Jonathan Ernst/Reuters)

Moments after the Supreme Court upheld a key provision of the Affordable Care Act, aka Obamacare, our inbox began to be flooded with statements from politicians either condemning or praising the 6 to 3 ruling. These e-mails were then followed by queries from readers asking for an explanation of the facts spouted in those statements.

Here’s a guide to some of the rhetoric, much of which we have covered in the past. As is our practice with such round-ups, we do not award Pinocchios.

“This fatally-flawed law imposes job-killing mandates, causes spending in Washington to skyrocket by $1.7 trillion, raises taxes by $1 trillion and drives up health care costs.”
— Former Florida governor Jeb Bush (R)

Bush got those numbers out of a recently released Congressional Budget Office report. (Go to Table 4.)  The report looked at the impact of repealing the law, so essentially you have to reverse the numbers. (In other words, read anything with a minus sign as positive, and anything with no sign as negative.)

The CBO calculated that from 2016 to 2025, the law would require $1.7 trillion in outlays (spending) while raising revenues (taxes) of $1.2 trillion. But the CBO also calculated that the law pays for itself — and reduces the federal deficit over the 10-year period — because the taxes, $800 billion in savings from Medicare and other provisions, exceed the $1.7 trillion price tag.

All told, the law is projected to reduce the deficit by more than $350 billion — something that Bush does not mention.

“Obamacare is fundamentally broken, increasing health-care costs for millions of Americans.”
— House Speaker John Boehner (R-Ohio)

Boehner emphasizes increased health costs, a claim also asserted by Bush. But there are many ways either side can spin this.

Obviously, the cost of health care generally goes up every year, though the rate of increase has slowed dramatically in recent years. Democrats stress this, but at this point it’s hard to give most of the credit to the health-care law. (We once gave President Obama Three Pinocchios for making this claim too emphatically.)

At the same time, Republicans are being disingenuous for assuming the law was going to result in an actual decrease in costs. In their defense, they point to some Pinocchio-laden statements made by Obama in the 2008 presidential campaign. 

“With individual premiums up more than 50 percent and nearly 5 million people losing their health plans, Americans deserve better than what we’re getting with Obamacare.”
— Former Texas governor Rick Perry (R)

In this quote, Perry is relying on one very stale talking point and one highly exaggerated one.

The “nearly 5 million people losing their health plans” comes from an Associated Press count in 2013 of the number of people who received notifications that their old policies were no longer valid under the law because it did not meet certain standards. (Recall that Obama had famously — and falsely — promised that if people liked their plans, they could keep them.)

But a large percentage of the people whose old plans were canceled were automatically moved to new plans offered by the same insurance companies.

On top of that, the White House ordered an administrative fix that, depending on the actions of individual states, allowed as many as 2.3 million people with “canceled plans” to simply stay on their old plans for at least another year. (Then the White House extended that deadline to 2016.) The administration also announced a new catastrophic exemption to fill any remaining gaps in coverage — estimated to affect as many as 500,000 people.

So the actual number of people “losing a plan” is far less than 5 million.

As for premium increases of more than 50 percent, Perry is relying on a conservative analysis of the individual market which compares pre-law plans with fewer benefits to current law plans. The Kaiser Family Foundation this week released an early analysis of plans in 10 states plus the District of Columbia and found that, on average, the cost of a benchmark silver plan would be 4.4 percent higher in 2016.

That’s about a 10th the figure touted by Perry. Moreover, it is worth recalling that before 2010, when the law was approved by Congress, premium increases in the individual market were about 10 percent each year.

“President Obama promised the average family’s health insurance premiums would drop $2,500 under Obamacare. In actuality, the average family’s premiums have risen $3,000.”
–Sen. Ted Cruz (R-Tex.)

This is an apples and oranges comparison, combined with a mischaracterization.

Obama in 2008 claimed that a health care overhaul would result in family savings of $2,500, compared to anticipated increases in premiums. In other words, he was not promising a cut in premiums, as Cruz claimed. Still, it was a foolish pledge, for which he received Pinocchios from The Fact Checker because it was based on a series of shaky assumptions.

After the Affordable Care Act was implemented, the White House amended the pledge to a savings of $2,000 by 2019.

In the meantime, the average premium for employer-sponsored plans has increased by about $3,000 from 2010 to 2014, according to the Kaiser Family Foundation. But that’s a good news story, because the rate of increase in premiums has slowed significantly.

“If you’re a senior or an American with a disability, this law gives you discounts on your prescriptions, something that has saved nine million Americans an average of $1,600 so far.”
— President Obama, statement in the Rose Garden

The president is referring to a provision in the law to slowly close a gap in Medicare prescription-drug coverage known as the “donut hole” by 2020. (Beneficiaries previously had to pay the full cost out of pocket before catastrophic coverage took effect.) Obama took his numbers from a 2015 Health and Human Services Department report that calculated the savings thus far; we have not vetted the methodology yet.

“If your family gets insurance through your job — so you’re not using the Affordable Care Act — you’re still paying about $1,800 less per year on average than you would be if we hadn’t done anything.”
— Obama

We have previously provided a lengthy explanation of this $1,800 figure, which is derived from the same Kaiser study from which Cruz obtained his “$3,000” figure. But in this case the White House focused on what premiums would have been if they had continued on the same path of premium growth from 2000 to 2010.

When we examined this in depth, the president earned Two Pinocchios for two key reasons. First, he had called it a “tax cut” of $1,800, when it’s unclear how much of this money actually ends up in an employee’s pocket. The “you’re still paying” language has the same problem. For all one knows, employers are pocketing the savings.

Moreover, Obama appears to be attributing the entire slowdown in cost increases to the Affordable Care Act–and the jury is still out on that. The slowdown in health-care costs has to be viewed in context — as the economic growth and price inflation was lower in the aftermath of the Great Recession. (Health care costs slowed around the globe, even in countries with no changes in health care laws.) So attributing the full $1,800 figure to the law is a stretch.

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