Five misleading Republican claims about health care

By Linda Qiu, New York Times News Service

Wednesday, July 5, 2017 | 2 a.m.

Republican lawmakers have their own version of the facts about the impact of their version of a replacement for the Affordable Care Act. Here is an assessment.

Sen. Patrick J. Toomey of Pennsylvania said falsely that the bill “does not pull the rug from anyone currently covered by Obamacare, and keeps the Medicaid expansion.”

A reader asked The New York Times to examine Toomey’s claims specifically as they related to Pennsylvania, where more than 700,000 people gained insurance through Medicaid expansion and 360,000 on the exchanges set up by the Affordable Care Act.

While the Senate bill does not revoke expanded Medicaid eligibility, it does gradually reduce the federal government’s contributions, while also capping future funding on a per-enrollee basis. The Senate bill’s changes to premium tax credits and its elimination of cost-sharing subsidies would affect all age groups, but especially older Americans.

This would lead to 15 million fewer Medicaid enrollees and 7 million fewer in the individual market within the next decade, the Congressional Budget Office estimated.

According to the Kaiser Family Foundation, a nonpartisan health research group, under the new bill Pennsylvanians would see a 72 percent increase in out-of-pocket premium costs, compared with a national average increase of 74 percent.

Sen. Lamar Alexander of Tennessee argued that the bill actually “increases Medicaid funding” at the rate of inflation, though current funding exceeds that.

Alexander’s carefully worded statement is technically accurate, but leaves a misleading impression.

The bill places a limit on the federal government’s share of Medicaid spending for different groups at different times. In 2020, it pegs funding growth to the medical inflation rate for children and adults at 3.7 percent, and at 4.7 percent for disabled adults and older Americans. In 2025, growth for all groups would be tied to the Consumer Price Index.

But Medicaid spending for adults and children under the current law is expected to growth faster, at 4.9 percent per year — a “substantial” difference in funding, the budget office said.

Sen. Mitch McConnell, the majority leader, said the bill would “reduce taxes on the middle class,” but most of the benefits go to high-income earners.

The budget office estimated that the bill includes tax cuts totaling $700 billion over the next decade. People at all income levels will see some of the money, but characterizing the cuts as a boon for the middle class is misleading.

More than $230 billion comes from repealing two taxes that apply only to individuals making over $200,000 a year. The bill would also eliminate a tax on health insurers, amounting to a cut of $145 billion.

Middle-class households would see an average tax cut of $280, according to the nonpartisan Tax Policy Center. In contrast, a household in the top 1 percent would get a cut of $250,000. Looking at overall distribution, two-thirds of the $700 billion would line the pockets of the richest one-fifth of Americans.

The White House and President Donald Trump used a flawed report to claim the Affordable Care Act led to premiums doubling and tripling.

A reader asked The Times to check a graphic circulated in the White House’s newsletter, Your 1600 Daily, stating that premiums “are up by 105 percent” since the ACA's enactment. Trump later bemoaned a 206 percent (actually 203 percent) increase in Alaska specifically.

The figures come from a May report from the Department of Health and Human Services that said premiums increased to $476 this year from $232 in 2013, before the health care law was enacted. According to the report, Alaska saw a drastic jump in average premiums to $1,041 from $344.

As The Times explained in a fact-check of McConnell, the comparison is imperfect — and Trump errs further by selectively choosing the second-highest increase to exaggerate the report’s findings.

Trump compares two fundamentally different universes of plans: all the plans on the individual market in 2013 and those only in the federal exchange in 2017. The plans are different, with Affordable Care Act plans covering more and sicker people and offering more comprehensive benefits.

The report also does not take into account premium tax credits that most Obamacare enrollees — 93 percent in Alaska, according to a different health and human services report — receive to help blunt the cost of premiums. Subsidies in Alaska this year averaged $976 a month, so people actually paid significantly less under the current bill than they did in 2013.

Sen. Ron Johnson of Wisconsin suggested misleadingly that the ACA “caused” a gap in Medicaid coverage.

An estimated 2.6 million people are uninsured because they live in states that did not expand Medicaid, but earn too little to qualify for premium tax credits in the Affordable Care Act markets. Blaming the health care law for the coverage gap distorts a chain of causality.

As written, the health law provides subsidies for marketplace insurance for people with moderate annual incomes, between 100 and 400 percent of the poverty level, about $22,160 for a family of four. It simultaneously increases Medicaid eligibility for low-income individuals, to a new limit of 138 percent from the previous threshold of 44 percent.

But the Supreme Court ruled in 2012 that the federal government could not compel states to expand their programs, with 19 states then declining to do so. In those states, people making 44 to 100 percent of poverty levels did not qualify for Medicaid or marketplace subsidies.

“The ACA intended to provide coverage across the income spectrum,” said Rachel Garfield, a Medicaid expert at the Kaiser Family Foundation. “The only reason that gap exists is because of those state decisions.”