Health Law Repeal: A Trail of “Broken Promises”
As House Republicans gear up for today’s vote on legislation to repeal “Obamacare”—the 31st such attempt in just 18 months—they return once again to the theme of broken promises.
To start, the bill charges; “President Obama promised the American people that if they liked their current health coverage, they could keep it. But even the Obama Administration admits that tens of millions of Americans are at risk of losing their health care coverage, including as many as 8 in 10 plans offered by small businesses.” A recent post on the House Ways and Means Committee’s website warns that “4 million to 20 million to 65 million” employees will lose insurance because of “Obamacare”—a range that seems curiously inexact.
The reality is quite different. Len Nichols, director of the Center for Health Policy Research and Ethics at George Mason University says that the “tens of millions of stuff” refers to bare-bones policies that do not meet the health law’s standard requiring insurers to spend 80% of what they collect in premiums on actual medical care. These are plans offered by McDonald’s and other employers that hire low-wage workers. Many of these employers were granted waivers, allowing them to offer this sub-par coverage to workers until 2014, when “subsidies and insurance reforms will make more comprehensive policies more affordable for most,” says Nichols. He continues, “They are technically correct that tens of millions [of workers] are in these policies now. They are NOT correct that people like them. They cover very small amounts of care, but they are all some employers currently offer.”
Another “broken promise” detailed by the latest repeal bill is that “the average American family already paid a premium increase of approximately $1,200 in the year following passage of the law. The Congressional Budget Office (CBO) predicts that health insurance premiums for individuals buying private health coverage on their own will increase by $2,100 in 2016 compared to what the premiums would have been in 2016 if the law had not passed.”
Again Len Nichols offers a reality check: “As usual, their claims are a mixture of hyperbole and fact misattributed to blame Obama.” The $1200 figure comes from the Kaiser Family Foundation’s annual Employer Health Benefits Survey which found an average 9% growth in employer-sponsored premiums between 2010 and 2011. Drew Altman, President and CEO of KFF wrote at the time; “The average family policy now costs more than $15,000 per year…Since we began doing this survey thirteen years ago, worker contributions to premiums have increased 168%, wages 50%, and inflation 38%.”
In this context it’s hard to imagine that passage of the health care law, and implementation of a few early initiatives are to blame for these long-brewing, troubling trends. The ACA provisions that went into effect after 2010 allowed young adults up to age 26 to stay on their parents’ insurance policies, required some plans to cover preventive services at no cost to patients, and did away with lifetime limits on spending.
Nichols, who is a healthcare economist, says that most “fair actuarial studies” attribute premium increases of just 1 to 3 percentage points (depending on the group plan size) to these provisions. For large group plans, the provisions add 1% to premiums. “Premium growth of 9% cannot be attributed to the ACA,” he adds.
So what is leading to the rise in health insurance premiums if not the excesses of the ACA?
Look no further than the insurers themselves. Some experts say last year’s 9% premium increase was partially a result of insurance companies jacking up their rates before 2012 rules went into effect that requires them to publicly justify any increases above 10%. Another explanation is that insurers assumed that the economy would pick up and people who have been delaying doctor visits, not taking medications and putting off other medical care would start utilizing more services. (This has not happened, and in fact, health care spending slowed in 2010 and 2011 to roughly 3%, says Nichols.) There is also a documented rise in prices for health-related goods and services like prescription drugs and hospital fees.
KFF’s Altman writes, “In the short term, employers have few new tools to control premium increases.” Employees will continue to see more high-deductible plans (with or without health savings accounts) that have lower premiums but require them to pay $1,000 or more in deductibles before coverage kicks in. According to a 2012 census released by America’s Health Insurance Plans (AHIP), more than 13.5 million people now have high-deductible health plans. And a recent paper from the Rand Corporation predicts; “Half of all workers at employer-sponsored health plans — including those working for the government — could be on high-deductible insurance within a decade.”
In the end, there is much to dispute in the “numbers” employed by conservatives to justify repeal of the health law. This latest attempt, like the past 30 others, is merely an exercise in rhetoric designed to whip up opponents and will quickly die (like the others) in the Senate. But despite being a colossal waste of time, there is another danger when our lawmakers keep mixing apples with oranges when assigning blame for our current healthcare woes. As Kathleen Sebelius, Secretary of the Department of Health and Human Services writes in an op-ed in the Washington Post; “People are entitled to their opinions, but not to their own facts.”
Sebelius calls the Supreme Court’s decision to uphold the Affordable Care Act “a turning point in the health-care debate, a chance to stop refighting old political battles and move forward with implementing and improving a law that is already lowering health-care costs and providing more security for millions of American families.”
What kind of “numbers” will it take to get us past the “refighting” stage?