These remarks got The Fact Checker wondering.
How does a member of Congress end up with a $12,000-$15,000 deductible when lawmakers are supposed to select low-deductible Gold plans?
And would a person making one-fifth of the congressional salary actually have to pay such a high deductible under the Affordable Care Act?
A member of the House makes $174,000 a year. So one-fifth of that would be $34,800.
First, let’s understand Mulvaney’s deductible from when he was a Republican congressman from South Carolina.
Under the provisions of the ACA, members of Congress and their direct staffs must obtain insurance from the small-business (SHOP) exchange of the District of Columbia. Moreover, to receive a 72 percent contribution from the federal government for the premiums, members and staff must purchase plans offered in the Gold tier.
But when we looked on the SHOP exchange at the Gold plans, many had no deductibles. At most, we could find a deductible of $3,500. So how did Mulvaney’s deductible get so high?
“Mick’s family has health-care needs that could not be met with any single policy on the D.C. exchange,” an aide said in an email. “With his triplets living at home in S.C. (with mom), and Mick splitting time between D.C. and S.C., there was no single provider that met their specific needs. (i.e. a plan that included the children’s existing doctors, Pam’s doctors, and care if it was needed by any of them in D.C.). As a result, like many other families, they needed two plans. Those plans together resulted in deductibles in the range he has described.”
Oh. Well, that’s not necessarily a typical situation. Mulvaney certainly left the impression he was talking about a single plan.
Now let’s look at that worker making $34,800. As with Mulvaney, we assumed he was married and had three children and lived in Lancaster, S.C. With the help of Cynthia Cox, associate director for the Program for the Study of Health Reform and Private Insurance at the Kaiser Family Foundation, we calculated the premiums and out-of-pocket costs for this worker and his family, both under Obamacare and under the House Republican plan.
It turns out that a person making one-fifth of Mulvaney’s salary would actually be able to afford to go to a doctor. In 2017, he would only have to pay $57 a month for his premiums on a Silver plan because Obamacare would provide $1,620 a month in premium support (tax credits). The total premium would be $19,439, but under the ACA, he would only have to pay 2.04 percent of his income on health-insurance premiums.
South Carolina is one of the states that refused to expand Medicaid, or else our worker and his family would have qualified for Medicaid. It’s also likely his children would have qualified for the Children’s Health Insurance Program, but to keep it simple we will assume a five-person family on the plan.
Essentially, the Silver plan would pay for 94 percent of expenses in total for covered benefits, meaning the deductibles are probably a few hundred dollars, and certainly less than $1,000. Total out-of-pocket costs would be capped at $4,700 a year.
To compare with the House bill, Cox ran the numbers for 2020. Under the Affordable Care Act, the base premium is projected to be about $22,040, while the tax credit would be about $21,300. That results in a yearly cost of $740, or $62 a month. The Silver plan would also have reduced cost sharing, again bringing their deductible below $1,000 and possibly as low as zero, depending on which plan the family picked.
Under the proposed House bill, Cox said the premiums would be more or less the same, as the adults would have higher premiums but the children lower premiums. But the family would only receive a tax credit of about $12,000, so the monthly premium would jump to $837. That’s 13 times higher than under Obamacare. Moreover, the family would no longer receive cost sharing, so their deductible would be much higher.
Republicans have said they would usher in insurance-market reforms that they claim also will help bring costs down but that would require 60 votes in the Senate, a still dubious prospect given there are only 52 Republicans. So, based on the legislation that’s written, the House replacement bill would be a bad deal for the worker and his family.
The Pinocchio Test
Mulvaney’s anecdote suggests he does not really understand how the Affordable Care Act works. He questioned how someone making one-fifth his pay could afford a doctor.
But it turns out that for people making below the median household income in the United States, the ACA is often a pretty good deal. There is certainly no premium support for someone making Mulvaney’s salary, and his particular deductible situation does seem rather high. But he was talking about the combined cost of two plans, not just a plan purchased as a member of Congress (who already receives a substantial reduction in premiums).
Moreover, the House Republican plan would substantially boost the price of health insurance for the proverbial South Carolina worker making one-fifth of his pay. That’s presumably not the message he wanted to send.
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