Summary

With the U.S. Supreme Court upholding the constitutionality of the Affordable Care Act on June 28, voters are guaranteed to continue hearing the same old false claims about the law from politicians. And President Barack Obama and presumptive GOP presidential nominee Mitt Romney wasted little time in taking to the airwaves to rehash plenty we’ve fact-checked before. Obama even threw in a few new claims.

Obama reiterated his “if you like your plan, you can keep your plan” refrain, despite the fact that at least a few million workers won’t keep their employer-sponsored plans, according to the Congressional Budget Office.

The president also exaggerated the benefits of the law, such as the number of young adults who were able to join their parents’ plans, thanks to the law, and the number of individuals who will receive rebates issued by insurance companies that didn’t spend enough premium dollars on health care.

Romney repeated a number of distortions, saying that the law would “cut Medicare” by $500 billion and that it “adds trillions to our deficits.” That’s a reduction in the future growth of Medicare spending over 10 years. And CBO says the law would reduce the deficit.

Romney said the law is a “job-killer.” But CBO says the law would have a “small” impact on jobs, mainly affecting the amount of labor workers choose to supply. Those getting subsidies, for instance, might work less hours since they’re paying less for health care.

Romney claimed the law “puts the federal government between you and your doctor.” The law would set minimum benefits packages, but medical services will not be government-run, nor does the law allow for rationing of care.

Analysis

The ‘Keep Your Plan’ Promise

Obama addressed the nation on June 28, shortly after the Supreme Court revealed its ruling on the Patient Protection and Affordable Care Act. In his comments, he quickly repeated one of his favorite, if false, talking points.

Obama, June 28: If you’re one of the more than 250 million Americans who already have health insurance, you will keep your health insurance. This law will only make it more secure and more affordable.

As we’ve said before, the president simply can’t make this promise. While the law does build on the U.S. system of primarily work-based coverage, the nonpartisan CBO has consistently said there will be some movement among those who currently have coverage.

The CBO has estimated that at least a few million Americans with employer-based insurance will in fact not be able to keep their current plans, and there’s nothing in the law that would prohibit employers from switching health care plans, just as they could before the law was passed. Also, the president’s 250 million figure includes everyone in the U.S. with insurance — the latest estimate from the Census Bureau is that 256.2 million Americans have health insurance. But those who buy private coverage on their own may have to get a new plan if theirs doesn’t cover minimum benefit standards, which are yet to be determined. Plus, the insurance carriers offering these policies can change the plans without the policyholders’ blessing. The CBO has estimated that by 2016, 2 million fewer persons will get coverage through the individual market.

Let’s look at employer-based coverage, since that’s how most Americans (55 percent of the population) get their policies. The latest CBO report on this topic found that under the most likely scenario, 3 million to 5 million fewer workers would get health insurance through their employers than would be the case without the law, from 2019 to 2022. Some of those employees would make the switch voluntarily, choosing “to obtain coverage from another source,” CBO said.

Furthermore, Obama can’t promise that employers won’t switch or drop plans, just as they could do before the law was enacted. The truth is that the power to keep a work-based insurance plan is largely out of the control of the worker. Large businesses, any with 51 or more employees, will have to pay a penalty under the law if they don’t offer coverage, and that penalty is $2,000 per full-time worker, excluding the first 30 workers. But that doesn’t mean that some employers won’t choose to pay the penalty, especially if their workers get low wages and can get federally subsidized insurance through the exchanges. Small employers can also get coverage through the state-based exchanges, so some could switch to those plans, meaning that their employees would not keep their current plan.

Comes Between You and Your Doctor?

Romney’s first public comments after the Supreme Court decision were also filled with false and misleading claims we’ve heard before.

Romney: And perhaps most troubling of all, Obamacare puts the federal government between you and your doctor.

The health care law does set new minimum benefits packages, but that’s more a matter of coming between patients and their insurance companies, rather than patients and their doctors.

Many Republicans have claimed the law’s Independent Payment Advisory Board will lead to a rationing of patient care. But as we have written repeatedly, the purpose of the 15-member panel of doctors and medical professionals, economists and health care management experts, and representatives for consumers is to find ways to slow the growth in Medicare spending.

The Patient Protection and Affordable Care Act explicitly states that IPAB “shall not include any recommendation to ration health care, raise revenues or Medicare beneficiary premiums … increase Medicare beneficiary cost sharing (including deductibles, coinsurance, and co-payments), or otherwise restrict benefits or modify eligibility criteria.” (See page 490.) The board’s recommendations, furthermore, will go before Congress, where they can be replaced with alternative cuts or rejected outright by a three-fifths majority.

And again, the health care law doesn’t come close to establishing a government-run system like those of Britain or Canada. While Medicaid will be expanded to more people, most Americans will continue to get their insurance through a private carrier. To the dismay of many liberals, a proposal to include a government-run “public option” to private health insurance was dropped during the legislative process.

The Impact on Young Adults

Obama stretched the truth when he said the health care law has “already helped 6 million young Americans.” He’s referring to a provision that allows young adults to remain on their parents’ health care plans up to the age of 26. But he includes those already insured who took advantage of the option to join their parents’ plan.

Obama: Because of the Affordable Care Act, young adults under the age of 26 are able to stay on their parents’ health care plans, a provision that’s already helped 6 million young Americans.

We can understand if viewers watching the president’s remarks thought that 6 million young adults gained insurance as a result of the federal law. But that would be wrong.

Obama is referring to a survey of young adults conducted by the nonprofit Commonwealth Fund. In a report issued June 8, the Commonwealth Fund estimated that 6.6 million young adults “who likely would not have been able to do so prior to the passage of the Affordable Care Act” stayed on or joined their parents plans.

But, as the Los Angeles Times explained, not all of the 6.6 million were uninsured.

In a recent press release, the Department of Health and Human Services said an estimated “3.1 million young adults would not have health insurance” without the health care law.

The HHS estimate is based on the National Health Interview Survey conducted by the National Center for Health Statistics, which is part of the Centers for Disease Control and Prevention.

The White House told us that the president’s statement is correct because all 6.6 million benefited from the law, but some more than others. True. But we note that even the first lady had been repeatedly using the figure of 3.1 million when describing the impact that the law has had on young adults, as she did most recently at a campaign event in Chicago.

Michelle Obama, June 26: Talk about how our kids can now stay on our insurance plans until they’re 26 years old — thanks to health reform. And that’s how 3.1 million more young people in this country are getting the health care they need. Make sure they understand that.

Now, however, the first lady has switched to the 6.6 million figure adopted by the White House as the new talking point.

Michelle Obama, June 28: And that is how 6.6 million young people are getting the health care they need today. That’s what health reform is about. We need you to let people know. Help them understand.

Preventive Care

Obama went a step or two too far in talking about some of the benefits of the law for consumers.

Obama: [Insurance companies] are required to provide free preventive care like checkups and mammograms, a provision that’s already helped 54 million Americans with private insurance.

Obama would have been on safer ground if he had said the provision potentially helped 54 million.

Here’s how the Obama administration gets that figure: The Kaiser Family Foundation found in its 2011 survey of employer health plans that 31 percent of workers with health insurance were in plans in which “the employer reported changing the services that are considered preventive services because of health reform.” The administration then figures that since 173 million persons under age 65 have private insurance, according to Census numbers, about 54 million received expanded preventive coverage. But it’s unknown how these employer-sponsored plans changed and whether all these estimated 54 million people were able to take advantage of the changes. Were they helped, as the president said? We can’t say for sure.

Rebate Overreach

Obama: And by this August, nearly 13 million of you will receive a rebate from your insurance company because it spent too much on things like administrative costs and CEO bonuses and not enough on your health care.

But most of these rebates will go to employers, not individuals.

The law requires that insurers spend 80 percent of premiums on health care or quality improvements, with 20 percent covering administrative costs, marketing and profits. Large group plans must meet an 85-15 ratio. If the plans don’t meet those requirements, they must pay a rebate to policyholders. But group plan rebates will go to the employers, and, as the Kaiser Family Foundation explains in a report on the rebates, will “in some cases be passed on to employees as well.” Those consumers most likely to get a rebate check sent to them personally are those who buy coverage on the individual market. A Health and Human Services Web page on the rebates says that 4 million persons in the individual market would get a rebate.

So, 13 million Americans aren’t getting a rebate check in the mail, as the president’s comment implies. In fact, HHS says that in addition to a check or credit, the rebates could come in the form of a reduction in premiums owed in the future, or through an employer providing some type of rebate to employees “or applying the rebate in a manner that benefits its employees.” Employers who pay all or part of the premiums are entitled to all or part of the rebate, too, according to the Department of Labor guidance on this topic.

Romney on Raising Taxes

Romney blamed the law for raising taxes and cutting Medicare, two claims that require further explanation.

Romney: Obamacare raises taxes on the American people by approximately $500 billion.

It’s certainly true that the health care law would raise taxes on some Americans, particularly those with higher incomes. The law includes a Medicare payroll tax of 0.9 percent on income over $200,000 for individuals or $250,000 for couples, and a 3.8 percent tax on investment income for those earning that much. The Joint Committee on Taxation estimated that the biggest chunk of revenue — $210.2 billion — comes from those taxes.

There are other taxes in the health care law — including an excise tax on the manufacturers of certain medical devices and on indoor tanning services. The health care law included $437.8 billion in tax revenue over 10 years, according to the Joint Committee on Taxation‘s calculations. Republicans tend to add in fees on individuals who don’t obtain health insurance (which the Supreme Court now agrees can be considered taxes) and businesses that don’t provide it to bump that up to about $500 billion.

Some taxes, such as those on medical devices, may or may not be passed on to consumers in the form of higher prices, but a large majority of Americans would not see any direct tax increase from the health care law.

Cuts Medicare by $500 Billion?

Romney: Obamacare cuts Medicare by approximately $500 billion.

As we have written many times, the law does not slash the current Medicare budget by $500 billion. Rather, that’s a $500 billion reduction in the future growth of Medicare over 10 years, or about a 7 percent reduction in growth over the decade. In other words, Medicare spending would continue to rise, just not as much. The law stipulates that guaranteed Medicare benefits won’t be reduced, and it adds some new benefits, such as improved coverage for pharmaceuticals.

Most of those savings come from a reduction in the future growth of payments to hospitals and other providers (not physicians), and a reduction in payments to private Medicare Advantage plans to bring those payments in line with traditional Medicare. (MA plans have been paid more per beneficiary than traditional Medicare.)

And it assumes they actually happen. There’s good reason to think that some of those reductions won’t be implemented. The law calls for cuts in the future growth of reimbursement payments to hospitals and other health care providers — that accounts for $219 billion of the Medicare savings in the law. But Congress has consistently overridden similar scheduled cuts in payments to doctors.

Adds Trillions to Deficits and Debt?

Romney: And even with those cuts and tax increases, Obamacare adds trillions to our deficits and to our national debt, and pushes those obligations on to coming generations.

The costs of the insurance coverage provisions of the health care law include federal subsidies for lower-income individuals to help them purchase insurance, expansion of Medicaid eligibility and tax credits for small businesses that provide coverage. In March, the nonpartisan Congressional Budget Office revised its estimate on the gross cost of those provisions of the law over the next 10 years. The updated estimate — $50 billion higher than the year before — came to nearly $1.5 trillion.

But that’s only looking at one side of the budgetary ledger — cost. Even though Romney claims he factored those in, his figure ignores major cost-cutting provisions including cuts in the future growth of Medicare and increased payroll taxes and investment-income taxes on higher-income earners (the same ones Romney had just mentioned).

Once all those revenue streams are factored in, CBO has estimated that the law would actually reduce the federal deficit by $210 billion over the 2012-2021 period (see Table 1, page 2). CBO did not update that overall figure in its latest report.

Kills Jobs?

Romney: Obamacare is a job-killer. Businesses across the country have been asked what the impact is of Obamacare. Three-quarters of those surveyed by the Chamber of Commerce said Obamacare makes it less likely for them to hire people.

As we have written before, claims about the health care law killing jobs are overblown.

This has been a standard line of attack for Republicans — one that was formalized in a January 2011 House bill titled “Repealing the Job-Killing Health Care Law Act.”

It’s true that the amount of labor in the economy would be reduced by “a small amount,” about half a percent, according to the CBO. That currently equals about 675,000 jobs. But the jobs would not be lost or killed. Most of those workers would have the “financial resources” — because of the subsidies provided by the law — to retire or reduce their hours, the CBO says.

Now, CBO also said that some businesses seeking to avoid paying for insurance could hire more part-time workers, rather than full-time employees. And John Sheils, senior vice president of The Lewin Group, has estimated that 150,000 to 300,000 low-wage jobs could be lost. But that estimate does not include the potential for job increases in the health and insurance industries. Overall, Sheils told us there would be a “small net job loss.”

Romney cites a recent online survey to support his claim that the law is a “job-killer.” The U.S. Chamber of Commerce conducted an online survey in late March and early April, and 1,339 executives at companies with fewer than 500 employees and revenues of less than $25 million participated. The chamber, which opposes the health care law and has run numerous TV ads attacking it, reported that 73 percent said the health care law is “an obstacle to growing their business and hiring more employees.”

That statistic was based on an online, opt-in survey of small-business executives. A press release from the Chamber of Commerce about the survey carries a large caveat: “This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated.” In other words, the chamber can’t be sure it’s a representative sample of small-business executives.

Those kinds of surveys can be useful for marketing research purposes, said Scott Keeter, director of survey research at the Pew Research Center and the most recent past president of the American Association for Public Opinion Research. “But from the point of view of public policy decisions, they tend not to be given much credence.”

“The bottom line is that surveys that have self-selected samples don’t have any known relation to the target group [in this case small-business owners],” Keeter said. “As a result, it is difficult, if not impossible, to know what kind of weight to give this.”

That is why, Keeter noted, that major news organizations like the Washington Post, New York Times and ABC News have strict policies prohibiting the reporting of such surveys.

20 Million Americans Will Lose Insurance?

Romney: Obamacare also means that for up to 20 million Americans, they will lose the insurance they currently have, the insurance that they like and they want to keep.

This is another exaggerated claim that we have written about before, most recently last month when the U.S. Chamber of Commerce made the claim in a TV ad.

The 20 million figure comes from a March 2012 CBO report, but critics of the health care law have misused it.

The CBO and the Joint Committee on Taxation estimated the impact of the law on employer-sponsored health care plans under four different scenarios. The estimates ranged from a reduction of 20 million workers on employer-sponsored plans to a gain of 3 million on such plans. The worst-case scenario was based on assumptions about employers’ behavior that were so extreme that they “have only rarely been reported in the research literature, and even then only for the behavior of small firms,” CBO said.

More likely, the CBO and JCT concluded, “about 3 million to 5 million fewer people, on net, will obtain coverage through their employer.”

— by Lori Robertson, Robert Farley and Eugene Kiely

Correction, Dec. 19, 2013: We originally wrote that 55 percent of those with insurance have employer-based policies, but it’s 55 percent of all Americans, not just those with insurance, according to the Census Bureau’s 2011 report. We regret the error. We also said that 30.1 million persons buy private insurance on their own. The Census Bureau report says the figure includes those who bought coverage directly and had another type of insurance during the year. Those who only bought directly totaled 11.3 million, or 3.7 percent of all Americans for 2010 (see Table 10).

Sources

Robertson, Lori. “GOP’s Job-Killing Whopper, Again.” FactCheck.org. 21 Feb 2012.

Congressional Budget Office. “The Budget and Economic Outlook: An Update.” Aug 2010.

“Q1 Small Business Outlook Study.” U.S. Chamber of Commerce. 16 Apr 2012.

Press release. “U.S. Chamber Statement on the Two-Year Anniversary of the Health Care Law.” U.S. Chamber of Commerce. 23 Mar 2012.

Press release. “U.S. Chamber Small Business Survey Shows Stalled Hiring Despite Increased Optimism.” U.S. Chamber of Commerce. 16 Apr 2012.

Congressional Budget Office. “CBO and JCT’s Estimates of the Effects of the Affordable Care Act on the Number of People Obtaining Employment-Based Health Insurance.” Mar 2012.

“Young, Uninsured, and in Debt: Why Young Adults Lack Health Insurance and How the Affordable Care Act Is Helping.” The Commonwealth Fund. 8 Jun 2012.

Levey, Noam. “6.6 million young adults on parents’ health plans, survey says.” Los Angeles Times. 8 Jun 2012.

Press release. “New health care law helps more than 3 million young adults get and keep health coverage.” Department of Health and Human Services. 19 Jun 2012.

White House. “Remarks by the First Lady at a Campaign Event.” 26 Jun 2012.

Congressional Budget Office. Selected CBO Publications Related to Health Care Legislation, 2009-2010. 22 Dec 2010.

Joint Committee on Taxation. Estimated Revenue Effects Of H.R. 3590, The “Patient Protection And Affordable Care Act (‘PPACA’).” 20 Mar 2010.

Neumann, Tricia. Tutorial: “Health Care Reform and Medicare: Overview of Key Provisions.” Kaiser Family Foundation.

Congressional Budget Office. Updated Estimates for the Insurance Coverage Provisions of the Affordable Care Act. March 2012.

Elmendorf, Douglas W. CBO’s Analysis of the Major Health Care Legislation Enacted in March 2010, Statement Before the House Subcommittee on Health Committee on Energy and Commerce. 30 Mar 2011.

American Association for Public Opinion Research. AAPOR Report on Online Panels. March 2010.

Government Printing Office. The Patient Protection and Affordable Care Act. 23 Mar 2010.