False assumptions on the health care law
An ad from a conservative advocacy group attacks the federal health care law by asking misleading and loaded questions about its impact. The ad features a mother named Julie, who asks, “If we can’t pick our own doctor, how do I know my family’s going to get the care they need?” The law doesn’t prohibit Julie from picking her own doctor.
She further assumes the government is going to be intimately involved in her family’s health decisions in asking, “Can I really trust the folks in Washington with my family’s health care?” Unless Julie’s family becomes eligible for Medicaid under the law, she’ll be getting private insurance, just as she is now (as best we can infer from the ad).
The TV spot, which Americans for Prosperity began airing in Ohio and Virginia July 9, directs viewers to the website ObamacareRiskFactors.com, which is more misleading than the ad itself. The site warns of reduced wages and hours for those who work for small employers that aren’t even subject to the law, for instance.
Ad wars resume
Over the past four years, the Affordable Care Act has been the focus of a hefty share of ad dollars. But those for and against aren’t done arguing about it yet — in fact, the war is heating up as major provisions of the law are about to take effect. In October, the health insurance exchanges will start accepting customers, and in 2014, the individual mandate, requiring most Americans to have insurance or pay a fine, kicks in.
So while Julie, a mother of two, prods viewers to feed their doubts about the law, another mom praises the benefits of the legislation in a TV ad from Organizing for Action, a nonprofit group that advocates for the president’s policies. In that spot, airing on cable channels CNN, MSNBC, Bravo and Lifetime, Stacey Lihn says the law eliminated lifetime caps on coverage. True, lifetime limits were prohibited early on, in 2010, and annual limits completely phase out on Jan. 1, 2014. Lihn, who spoke at the Democratic National Convention and has documented her family’s story on her personal blog, says that her daughter, Zoe, who was born with a congenital heart defect, “was halfway to her cap before her first birthday. Thanks to Obamacare, we can now afford the care that Zoe needs.”
The conservative ad is more general, and we don’t know much about the circumstances of the family in it. The mother, Julie, says her son had seizures two years ago and she has questions about Obamacare. Julie asks, “If we can’t pick our own doctor, how do I know my family’s going to get the care they need?”
But Julie doesn’t mean that she won’t be able to actually select a physician on her own, as the question implies. Instead, the worry is that she won’t be able to keep her current doctor.
AFP spokesman Levi Russell told us that the law will limit provider networks and the choice of doctors for “millions” of Americans. But the support for that claim mainly pertains to those who would be buying their own insurance on new insurance exchanges or new Medicaid enrollees who will qualify for the program under the law’s Medicaid expansion. And most of those individuals will be newly insured.
We can infer from the ad that Julie’s family has insurance and wouldn’t be seeking it on the exchanges or Medicaid. But we don’t know for sure. Russell would not provide more information on Julie’s circumstances other than to say she and her family are real, not actors. He said the group didn’t want to make Julie’s family the “centerpiece” of the ad campaign. “Instead, their experience should point others to go learn more for themselves and how they personally will be impacted,” he said.
Let’s assume Julie’s family has employer-sponsored insurance, as 57 percent of non-elderly Americans do. AFP points out that the nonpartisan Congressional Budget Office has estimated that those with work-based coverage will decline by 7 million, on net, because of the law by 2023.
That figure is a combination of workers losing coverage, others gaining it and others buying insurance elsewhere. The CBO estimated that for 2019 — when the net figure is 8 million — those losing an offer of employer-based insurance, which they would have received had the law not been enacted, would be 12 million, with 7 million others gaining work-based coverage because of the law, and 3 million more declining their employers’ offer and getting insurance elsewhere. CBO has explained in its previous estimates that businesses dropping coverage are likely to be smaller companies with low-income workers who would be able to get subsidies to buy insurance on the exchanges.
It’s possible Julie will find herself among the employees who lose coverage, buy a new plan elsewhere and not have her same doctor in the provider network. But her chances are small: 160 million Americans are expected to have work-based coverage in 2023 under the law, up from 155 million in 2013.
AFP provided two other pieces of support for this claim. A March 1, 2013, Wall Street Journal article said that some insurance plans sold on exchanges will likely have small networks of providers in order to keep premium costs down: The insurers were asking for a discount from hospital groups in exchange for the hospitals getting new customers as part of a small network. And a Health Affairs study found 31 percent of doctors didn’t accept new Medicaid patients in 2011. That’s not due to the health care law, but it’s a concern since the law will expand Medicaid eligibility by about 12 million in the coming decade. That study also said an increase in fees to primary care physicians under the law — for 2013 and 2014 — could boost the acceptance rate, at least temporarily. But doctors not being open to new patients is a problem generally: Eighteen percent weren’t accepting new privately insured patients.
Perhaps more germane to this losing-your-doctor worry is the fact that the Affordable Care Act doesn’t guarantee — and simply can’t — that everyone who likes their doctor and their current health plan can keep them, as President Obama has often claimed. As we’ve said before, employers are free to switch or drop insurance plans under the law — just as they were before it was enacted. And workers who change jobs have no guarantee — before or after the law — that their new health plan will include their doctors in provider networks.
Premiums, pay checks and big government
Julie goes on to ask, “What am I getting in exchange for higher premiums and a smaller paycheck?” Again, we don’t know Julie’s circumstances and why she assumes her paycheck is going to get smaller and her premiums are going up. But it’s true that expanded benefits required by the law have caused premiums for work-based plans to go up, on average.
When family premiums for employer plans jumped 9 percent from 2010 to 2011, experts told us the Affordable Care Act was responsible for a 1 percent to 3 percent hike, with the remainder due to higher medical costs, the usual culprit for increasing premiums. The law’s provisions that caused the bump were the elimination of preexisting condition exclusions for children, the requirement that dependents be covered on their parents’ plan to age 26, free coverage of preventive care, and the increase in caps on annual coverage.
So those are some of the increased benefits that Julie is already getting in exchange for slightly higher premiums.
For 2012, employer-based insurance went up a much smaller 4 percent on average. The growth in national health spending from 2009 to 2011 has been at historic lows, around 4 percent, and that trend is expected to continue for 2012 and 2013. Experts mainly say the down economy is the reason for reduced growth in spending, though it’s possible the Affordable Care Act’s emphasis on new payment models may be leading to more efficient care by health care providers.
If Julie purchases her own insurance, it’s unknown what exactly would happen to her premium, as we’ve explained before. Some individuals will pay more, and some will pay less. Some will get significantly more generous benefits for higher premiums; others may not even want a more generous plan. Benefits and premiums vary widely on that market, and the change in premiums for individuals will likely also vary widely — depending on what benefits they have now, health status, the protections of the state they live in and more. The Affordable Care Act does prevent discrimination based on preexisting conditions, limit variation in premium rates (to age, where you live, family size and tobacco use), and require a minimum benefit standard for these plans.
Most of those purchasing plans on the exchanges — about 80 percent — will qualify for government subsidies to offset the premium cost, according to the Congressional Budget Office. If Julie’s family earns up to 400 percent of the federal poverty level — $94,200 for a family of four — the family will qualify for a subsidy.
Finally, Julie wonders how well the government can manage her health care, asking, “Can I really trust the folks in Washington with my family’s health care?” But the law doesn’t put the government in charge of health care decisions — despite the many claims we’ve seen over the years to the contrary. This isn’t a “government-run” plan or “takeover,” as so many have tried to claim. There’s no board deciding who gets brain surgery or picking anybody’s doctor for them.
The law greatly expands private insurance, bringing millions of new customers to insurance companies. It’s true there are new insurance regulations as we’ve mentioned — no annual or lifetime limits on coverage, no preexisting condition exclusions, a standard set of minimum benefit requirements for plans on the exchanges. But those are consumer protections, not rules that put Washington in charge of managing families’ health care.
More questions than answers
The AFP ad encourages viewers to visit ObamacareRiskFactors.com, where they can input some basic information about themselves and answer the question, “Are you at risk under the new healthcare law?” But don’t expect an unbiased answer.
When we said we worked for an employer with 0 to 50 employees, our first risk factor was a warning that our hours or pay could be cut because of “requirements to provide insurance to all employees.”
The warning said that “government forces employers to make a difficult choice: reduce employee’s hours or wages or go out of business.” But employers with less than 50 full-time workers aren’t subject to any requirement to provide insurance to their employees. There was no mention of that, despite the fact that we had said we worked for a small employer. (The administration recently announced that it was delaying the requirement for employers with 50 or more workers for one year, until 2015.)
The risk factors we received also warned of “longer lines and delayed care,” citing a doctor shortage of 45,000 primary care physicians by 2020, estimated by the Association of American Medical Colleges. The warning doesn’t make clear that the AAMC said a shortage was predicted before the law was passed, but the shortage coupled with adding tens of millions to the rolls of the insured is certainly a legitimate concern. AAMC said the coverage expansion will “exacerbate a physician shortage driven by the rapid expansion of the number of Americans over age 65.” It called for Medicare-funded residency training to help alleviate the problem.
AFP exaggerates by saying that “[t]hese problems will continue to get worse as one-third of doctors will retire over the next decade — many fueled by ObamaCare’s rules and regulations.” AAMC says simply that one-third will retire because “[o]ur doctors are getting older, too.”
Americans for Prosperity almost gets it right when it says that “ObamaCare mandates that employers provide insurance coverage to all full-time employees, but it doesn’t mandate that coverage be provided for spouses or children.” The law does mandate that insurance policies cover children up to age 26. But it’s true there’s no mandate for coverage of spouses.
Of course, there was no mandate for employers to cover spouses before the law, and some firms have charged more for spouses or, for a small percentage of large firms, excluded them from coverage. The human resources consulting firm Mercer has said that its 2012 health benefits survey found 4 percent of employers with 5,000 or more employees denied coverage for spouses. MarketWatch reported in a February 2013 article that the practice, primarily used for spouses who could get insurance through their own jobs, could increase as health care expenses continue to rise (with or without the Affordable Care Act) and as the state-based exchanges created under the law give spouses another option for coverage. MarketWatch quoted Joan Smyth, a benefits consultant at Mercer as saying, “When there’s a place for people to go, employers won’t feel as beholden or compelled to cover the spouse.”
It remains to be seen whether the lack of a spouse mandate will have an impact.
The risk factors also warned that “[f]ailing to purchase insurance will result in a tax penalty of $695.” True, when the law is fully implemented in 2016. But the AFP site only tells half the story. It doesn’t ask whether individuals already have insurance or not, and it says nothing about opportunities for federal subsidies to help the uninsured buy coverage or expansion of Medicaid eligibility.
We’re not suggesting that the Affordable Care Act shouldn’t prompt questions and concern from Americans. There are many unknowns about how exactly a law of this magnitude will play out, particularly its impact on those who buy their own insurance. But don’t expect honest answers from a partisan anti-Obamacare campaign.