— White House acting chief of staff Mick Mulvaney, in remarks on ABC News’s “This Week,” March 31, 2019
Mulvaney, defending President Trump’s revived push to replace the Affordable Care Act, made several inaccurate statements about health care when he made the rounds of the Sunday-morning talk shows. But we are going to focus on this one because it involves numbers and allows for a relatively straightforward fact check.
Mulvaney made a simple comparison: He said more people paid a fine for not having health insurance than people who gained from the ACA, a.k.a. Obamacare. So how do the numbers stack up?
The White House did not respond to a request for an explanation of Mulvaney’s math. It’s possible that he’s simply confused about how many people pay what are known as “Shared Responsibility Payments.” On CNN’s “State of the Union,” he said, “There were tens of millions of people who were paying a fine, paying a fee, rather than take Obamacare.”
But that’s wrong. According to most recent Internal Revenue Service data (Statistics of Income), for 2016, 4.95 million taxpayers made the payment, at an average cost of $732. That’s a decline from the year before, when nearly 6.67 million taxpayers made payments at an average cost of $462. The penalty had been increasing, but effective Jan. 1, 2019, the tax bill signed by President Trump set the penalty at zero. (The mandate has not been eliminated.)
A letter to Congress in 2017 by the then-IRS commissioner gave a little more detail about the 2015 payments: the median payment was about $330, and 7 percent were $100 or less. “The vast majority — 77 percent — of taxpayers reporting a shared responsibility payment still reported a refund,” the letter said. About 8 million taxpayers reported a payment in 2014. So the trend line had been going down.
Why so few people? That’s because many more people qualified for exemptions from paying the fee. In 2015, 12.7 million taxpayers claimed one or more exemptions. Exemptions are granted for a number of reasons, but the most common one is that an individual has income below a certain threshold and lives in a state that did not expand the eligibility for Medicaid. The second-most common exemption is if a citizen lives outside of the United States. People also did not need to pay a penalty if they would have had to pay more than 8.05 percent of their income (in 2015) to obtain health insurance.
Of course, this reflects tax returns, not people. We cannot assume that 5 million taxpayers represent just 5 million people, so we cannot easily make an apples-to-apples comparison. But let’s give it a shot.
The SOI data shows that 3.3 percent of tax returns paid a mandate penalty.
In 2016, about 10 million people were enrolled in the Obamacare exchanges, according to U.S. government data.
Moreover, in 2010, the ACA began requiring all insurers to allow young adults up to age 25 to enroll in a parent’s health plan. Most analysts generally accept that the number of people who gained insurance because of the provision is 2.3 million.
(This is a “frozen in time” number that dates from 2013, indicating the increase in young adults with insurance before the rest of Obamacare kicked in. The number of people without insurance in ages 19-25 has declined significantly since 2010, from 33.9 percent to 14.8 percent in 2018. But much of that improvement stems from other factors related to the law, not the provision that allows young adults to stay on parents’ plans. The 2.3 million estimate, as we have noted in the past, is not universally accepted. A 2014 article in the New England Journal of Medicine calculated a figure of 1 million.)
The 10 million on Obamacare and 2.3 million young adults add up to 3.8 percent of the U.S. population in 2016, or more than the 3.3 percent represented in the tax returns that made payments. (We will ignore the fact that the 15 percent of the population is over 65 and in theory would be on Medicare, and thus don’t need health insurance.)
Matthew Fiedler, a fellow at the Brookings Institution who suggested this approach, said that this comparison was probably too generous to Mulvaney for several reasons.
“Not all people file tax returns, so the denominator for the 3.3 percent is too small,” he said. “Not every person on a tax return on which somebody paid the mandate penalty paid the penalty themselves.” He added that he suspected “the typical tax unit in which somebody paid a mandate penalty is smaller than average, in which case the 3.3 percent of tax returns would correspond to a smaller fraction of the total population.”
But Mulvaney’s assertion really goes off the rails when you consider the impact of the expansion of Medicaid, the health program for the poor. He did not mention it, but that was also a key part of the Affordable Care Act. The law offered Medicaid to nearly all low-income individuals with incomes at or below 138 percent of the poverty level, or $27,821 for a family of three in 2016. In Kentucky, far more people qualified for health care under Medicaid than signed up for Obamacare insurance.
The number of people who gained because of the Medicaid expansion is a bit fuzzier and open to interpretation. “There are 17.1 million in the expansion group for whom states are getting enhanced federal matching payments,” said Larry Levitt, a senior vice president at the Kaiser Family Foundation. “There are 12.7 million who were made newly eligible. The reason the numbers are different is because some states had waivers pre-ACA that included some of these enrollees.”
Even taking the lower number would more than double the percentage of the population who gained from Obamacare. So it would be 7.7 percent, versus 3.3 percent or fewer making payments.
The Pinocchio Test
As a matter of simple math, Mulvaney is wrong. Far more people — twice as many — gained under the Affordable Care Act than paid a penalty. We’re not sure why Mulvaney would have such a limited understanding of the impact of the law, but it may have started with his misimpression that “tens of millions of people” were paying a fine. That’s totally off base, too.
He earns Four Pinocchios.
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