The Republican National Committee claims that 8.2 million Americans can’t find full-time jobs “partly due to ObamaCare.” But that figure is the total number of part-time workers in the U.S. seeking full-time work. The RNC also claims 6 million retirees “will lose prescription drug coverage” under the health care law. But 6 million aren’t expected to go without drug coverage. Instead, they are expected to lose employer-sponsored drug plans and join other Medicare Part D plans instead.
These are just two of a list of 57 figures the RNC calls “ObamaCare By the Numbers,” a compilation the GOP has promoted in years past as well. Several items repeat old claims we’ve seen many times before. For instance, the RNC claims the law “cuts” Medicare by $716 billion, but that’s a reduction in the future growth of Medicare spending over 10 years, not a slashing of the current budget. And the RNC repeats the well-worn distortion that 800,000 “Will Be Cut Out Of The Workforce By ObamaCare,” a twisting of the Congressional Budget Office’s analysis that actually said there would be a reduction in labor primarily because people would choose to work less.
Other numbers in the list are true: The gross cost of insurance coverage provisions in the law do add up to $1.8 trillion for 2014 to 2023, according to the nonpartisan CBO, and the law’s 10 percent excise tax on indoor tanning services would amount to $1.5 billion over 10 years, according to the Joint Committee on Taxation.
We’ll go through the new, misleading criticisms that caught our attention.
More Part-Time Workers?
RNC, July 15: 8.2 Million: Americans Unable To Find Full-Time Work Partly Due To ObamaCare.
The RNC wasn’t the first to suggest the health care law was blocking part-timers from getting full-time jobs. Early in July, House Speaker John Boehner and Majority Leader Eric Cantor made similar claims:
Boehner Press Conference, July 9: Because of ObamaCare, millions of full-time workers can only find part-time work.
Cantor Press Conference, July 23: The problem is, the only thing that [Obama] has done is acted to continue to implement ObamaCare, which as we all know now is creating a part-time worker economy, not a full-time economy that can grow.
The RNC’s 8.2 million figure is the total number of Americans working “part-time for economic reasons,” either because they couldn’t find full-time work or because their hours had been reduced, according to the Bureau of Labor Statistics’ June figures. Certainly, everyone who can’t find a full-time job, in a still recovering economy, isn’t in that predicament “partly due to ObamaCare.”
The 8.2 million is actually less than the 9.1 million part-timers seeking full-time work in March 2010, the month the Affordable Care Act was signed into law. BLS figures show that this category of workers skyrocketed in 2008, from 4.8 million in January of that year to 8 million in December. (The nation was officially in a recession from December 2007 to June 2009.)
In recent years, the number working part-time for economic reasons has fluctuated, but in general, has been on a slow trajectory downward. Here’s a chart of BLS data, showing the pre- and post-health care law figures.
The health care law requires employers with 50 or more full-time workers (defined as 30 hours per week or more) to provide insurance or pay a fine. The Obama administration recently delayed that requirement until 2015. It’s possible that some among the 8.2 million part-timers had their hours cut by employers concerned about the law’s requirements. But we don’t know how many that might be, and neither do the Republicans.
There’s no evidence from the BLS numbers that the Affordable Care Act has had an influence on those seeking full-time work. But that didn’t stop Wyoming Sen. John Barrasso from claiming exactly that. Barrasso went into more detail than the RNC, claiming that those working part-time for economic reasons “soared by over 300,000″ in June. He continued in his July 9 remarks to Congress: “There are now 8.2 million Americans working part-time jobs because their hours were cut back, or because they couldn’t find full-time work. Republicans have been warning that this would happen because of the Democrats’ health care law, and that’s exactly what’s been happening for months now.”
But the 300,000 increase in June was more of a continuing fluctuation than a soaring. And there’s no trend showing an increase is “exactly what’s been happening for months now.” The big jump in these part-timers occurred back in 2008, not because of the health care law.
Medicare Part D
RNC, July 15: 6 Million: Retirees That Will Lose Prescription Drug Coverage.
This claim implies that the Medicare prescription drug coverage, known as Part D, is being scaled back. But that’s not the case. The RNC is referring to a little-known provision in the law that changes the tax treatment for subsidies that the government gives to companies that offer their own retiree prescription drug programs.
The government gives qualifying employer plans a subsidy — called the retiree drug subsidy — worth 28 percent of prescription drug plan costs, and those employers have been able to deduct the subsidy amount from income taxes. But the health care law changes that. Beginning in 2013, employers won’t be able to deduct drug plan costs covered by this subsidy. Also, other Part D plans are becoming more attractive to seniors: The health care law gradually closes the gap in drug coverage, known as the doughnut hole, and it provides a 50 percent discount on brand-name drugs. The retiree drug subsidy, meanwhile, stays put at 28 percent.
For those reasons, the number of seniors on these plans is expected to decline by 6 million between 2010 and 2016, according to the Medicare Board of Trustees’ 2013 report. “It is expected that the majority of the retirees losing drug coverage through qualifying employer plans will participate in other Part D plans,” the trustees’ report said. (See pages 149-151.)
At the same time, total Part D enrollment is expected to go up, from 34.8 million in 2010 to 42.3 million in 2016. So while employer-subsidized plans are projected to decline by 6 million from 2010 to 2016, total Part D enrollment is expected to increase by 7.5 million.
By taking away the deduction of the subsidy, government revenues increase by an estimated $3.1 billion, according to the Joint Committee on Taxation. The RNC twists that, claiming the $3.1 billion amounts to “Taxes On Retiree’s Prescription Drug Plans.” Note that these are the same retirees that the RNC says will lose their drug plans — it’s tough to be taxed on a plan you no longer have. No retiree will get hit with a new tax. Instead, certain employers won’t be able to deduct the subsidy from their tax liability.
Inflating Health Care Spending
RNC, July 15: $3 Trillion: Projected Federal Health Care Spending In 2023.
The RNC attributed this figure to a May 2013 CBO report. But the CBO didn’t say that federal health care spending would total $3 trillion in 2023. Instead, it said that Social Security and major federal health care programs would cost that much.
CBO, May 14, 2013: Most mandatory spending consists of outlays for Social Security and the federal government’s major health care programs. By 2023, net outlays for those components of mandatory spending will total $3.0 trillion …
The RNC ignores Social Security, which is estimated to total a little more than $1.4 trillion in 2023, nearly half of the total spending for these mandatory programs. The gross cost of insurance coverage provisions in the health care law, meanwhile, is expected to cost $250 billion that year.
Plenty of Premium Spin
The RNC lists several numbers about premium increases, but doesn’t tell the full story behind the figures.
RNC: 56%: Expected Premium Increase For A Healthy Male Ages 21-29 On The Individual Market Under ObamaCare.
This was an average estimate by the consulting firm Milliman. The RNC points to a CNN Money article, which also quotes the author of the Milliman report saying: “The average isn’t very relevant to any particular person.” The May 2013 article concludes: “At this point, everyone — including the insurers — is just guessing at what premiums should be.”
It may be frustrating to those who buy their insurance on the individual market — currently that’s 15 million Americans (or 6 percent of those under age 65) — but it’s difficult to estimate how exactly their premiums will change. There will be winners and losers, and even Health and Human Services Secretary Kathleen Sebelius has acknowledged that. “Women are going to see some lower costs, some men are going to see some higher costs,” Sebelius said in March. “It’s sort of a one to one shift … some of the older customers may see a slight decline, and some of the younger ones are going to see a slight increase.”
The author of the Milliman report estimated a big average increase for young men, but said women’s premiums on average would increase slightly. And older men (ages 60-64) would see a decrease.
But, as we’ve said before, it’s tough to make a blanket estimate in the individual market, where premiums and benefits per plan vary widely. Whether an individual’s premium goes up or down, and by how much, depends on what kind of plan they’re purchasing now (bare bones or with benefits similar to what will be minimum requirements under the law), health status, age, and existing state regulations on insurance companies. And then there are federal subsidies, which are available to those earning up to 400 percent of the federal poverty level. The CBO estimates that 25 million Americans will get coverage through the state-based exchanges in 2023, with about 80 percent of them receiving federal subsidies.
RNC: 32%: Average Increase In Health Care Costs Per Person According To The Society Of Actuaries.
This is an estimate for costs to insurance companies in the individual market — not in all markets. The analysis was sponsored by the Society of Actuaries, an organization of actuaries who mostly work for the insurance industry. It was conducted by the Lewin Group, a subsidiary of UnitedHealth Group that operates independently of the health care company. The analysis estimated that for the individual market the “cost per member per month will increase 32 percent under ACA, compared to pre-ACA projections.”
The report said that it didn’t attempt to estimate premium costs — which it said would vary based on factors such as competition. But it’s true that costs to insurers could be passed along to consumers.
RNC: $255: Average Monthly Increase In Family Health Care Premiums Under Obama.
RNC: $76: Average Increase In Monthly Premiums That Americans Pay Under Obama.
These figures come from the Kaiser Family Foundation/Health Research & Educational Trust’s annual employer health benefits surveys, which show that premiums for employer-sponsored plans have been going up for years, since well before Obama took office. The figures above are for total premiums, paid by both employer and worker combined. Experts told us the health care law was responsible for a 1 percent to 3 percent increase in family premiums from 2010 to 2011 — they went up a total of 9 percent, mainly due to higher medical costs. The increase due to the law was attributed to 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. From 2011 to 2012, employer-based family plans increased by just 4 percent on average, a jump Kaiser and HRET called “moderate by historical standards.”
What’s the takeaway from all these premium figures? Insurance premiums are expected to continue to go up, as they have for years, with or without the Affordable Care Act. And there’s still uncertainty for those who currently buy insurance on the individual market.
– Lori Robertson and Justin Cohen