“Americans were told that premiums would go down by $2,500 per year. And instead, their premiums went up to levels that nobody thought even possible.”
“It was just announced yesterday that 2 million people have dropped out of Obamacare — 2 million additional. They are leaving fast.”
“Insurers are fleeing the market. Last week it was announced that one of the largest insurers is pulling out of Ohio — the great state of Ohio.”
–President Trump, remarks to Republican senators, June 13, 2017
Not a day goes by without President Trump bashing the Affordable Care Act, a.k.a. Obamacare, as he tries to urge the Senate to pass its own version of a repeal-and-replace bill. He’s become a torrent of statistics as he has tried to make the case that the law is “dead,” as he puts it.
Increasingly, the president is aided by reports churned out by the Department of Health and Human Services, which under President Barack Obama used to issue dubious reports defending the law but now offers dubious reports to undermine it.
Let’s take a close look at three of Trump’s claims.
Trump takes a misleading GOP talking point and hypes it up even more – that premiums “went up to levels that nobody thought possible.”
Obama, when campaigning in 2008, did misleadingly say that his plan would reduce premiums for families by $2,500. As we have noted before, Obama’s pledge came with a very large asterisk: He was not saying premiums would fall by $2,500, but that health-care costs per family would be that much lower than anticipated. In other words, if overall costs — not just premiums — were expected to rise by $5,000 by 2012, they would only rise by $2,500. That nuance often was lost in his campaign statements, and he was quickly called out by fact checkers.
Over the years, Republicans have compared this misguided Obama pledge with the increase in annual family premiums for employer-provided plans, even though the ACA largely was aimed at the individual insurance market. Back in January, for instance, Vice President Pence said “American families have seen an increase in premiums of $5,000.” That statistic reflected the change in employer-provided insurance premiums from 2010 to 2016, as documented by the Kaiser Family Foundation.
But here’s the funny thing: Health costs for employer-provided plans have grown much slower than expected since the Affordable Care Act was implemented. Experts debate whether the ACA played a significant role, but the average family premium is now almost $3,600 lower than if premium growth had kept pace with the rate in the decade before the law was passed, according to Kaiser.
Kaiser estimated that cumulative premium increases were 63 percent for 2001-2006, 31 percent for 2006-2011 and 20 percent for 2011-2016.
More recently, Pence has asserted “the average premium cost today is nearly $3,000 a year more for Americans than it was in 2013.” Why the $2,000 decrease? He’s now citing an HHS report that claimed Obamacare premiums have increased 105 percent from 2013 to 2017. But there are problems with that report.
First, it’s difficult to simply compare average health insurance premiums in the individual market before and after the ACA because the law eliminated insurance plans with low costs but few benefits — what the Congressional Budget Office says barely qualifies as insurance. One study found that, when adjusting for actuarial value to create an apples-to-apples comparison, individual-market premiums actually dropped after the introduction of the ACA.
Second, the HHS report did not account for the fact that older and less healthy people were now able to afford insurance because of tax subsidies. Indeed, the report fails to mention that about 80 percent of people in the marketplace are not affected by premium increases because their costs are mostly covered by the government.
Average insurance premiums in the Obamacare marketplace now are about at the level predicted by the CBO for 2017 when it first evaluated the law in 2009. But premiums have certainly spiked in recent years, as insurance companies grappled with a mix of people in the insurance pools tilted toward people who have chronic illnesses and thus require more care and frequent doctor or hospital visits.
2 million people dropping out
This statistic is courtesy of another dubious report issued by HHS, though Trump hyped it up even more. The report did not say 2 million people dropped out. Instead, it said that 10.3 million had paid for their first premium in February as of March 15, compared with 12.2 million who had signed up for coverage as of Jan. 31.
But here’s what is fishy: Previous such reports, even ones issued earlier than June 12, included data through March 31. In virtually every state, people signing up for coverage between Jan. 15 and Jan. 31 do not even pay a first premium until March. Charles Gaba, who assiduously tracks Obamacare enrollment at ACASignups.net, estimates that leaves off about 500,000 people. Using enrollment as of Jan. 31 rather than enrollment through Jan. 15 also serves to inflate the purported decline.
The individual market has always had a lot of flux – people drop out when they get a job that provides health insurance – so the attrition rate likely would not have been unusual if HHS had not manipulated the numbers. An HHS spokeswoman said the report eventually will be updated with the full March data but otherwise would not explain why the report was done differently than in the past.
Trump decries that some insurance companies have announced they are leaving the Obamacare marketplace. But he ignores that many say they are exiting the business because of uncertainty created by the Trump administration, in particular whether it will continue to pay “cost-sharing reductions” to insurance companies. These payments help reduce co-pays and deductibles for low-income patients on the exchanges. Without those subsidies, insurance companies have to foot more of the bill.
Trump specifically mentioned Ohio. But Anthem Insurance, saying it would leave the state’s exchange, cited the lack of certainty about the cost-sharing payments and “an increasing lack of overall predictability.” So Trump, decrying the “broken promise” represented by the departure of insurance companies, blames Obamacare for problems that his administration has fostered.
Trump also said that “nationwide, one in three U.S. counties have only a single insurer.” That’s correct, but many of these counties are rural and sparsely populated, so in reality about 20 percent of the people on the exchanges have only a choice of one insurance carrier.
But that may be changing. Even as Trump addressed senators, the insurer Centene, which already covered 1.2 million people on the exchanges, announced that it would expand its offerings in Obamacare, pushing into Nevada, Missouri and Kansas for the first time and adding presence in six other states, including Ohio. The company said that while “there is uncertainty of new health-care legislation,” it also saw opportunity where other companies had left the market.
On June 15, the Cleveland Clinic announced it would jump into the Ohio individual market through a joint venture with New York-based Oscar Insurance Corp., a health insurance tech startup, despite what officials called “the turmoil and the uncertainty around the public exchange and the public marketplace.”
The Pinocchio Test
President Trump continues to mangle his facts about the Affordable Care Act. As we have frequently noted, the ACA mostly affected the individual market, yet the president suggests he’s talking about all health insurance. In the Obamacare markets, premiums have not spiked to unimaginable levels, 2 million people have not dropped out and insurance companies departing the business have cited the administration’s own policies for creating uncertainty in the marketplace.
The president earns Three Pinocchios.
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