FactCheck.org http://www.factcheck.org A Project of the Annenberg Public Policy Center Thu, 17 Apr 2014 21:12:31 +0000 en-US hourly 1 http://wordpress.org/?v=3.8.1 More Weak Claims on Cotton’s Insurance Ties http://www.factcheck.org/2014/04/more-weak-claims-on-cottons-insurance-ties/ Thu, 17 Apr 2014 21:12:31 +0000 http://www.factcheck.org/?p=83943 Another liberal group is attacking Republican Rep. Tom Cotton in Arkansas by saying Cotton has experience in the insurance industry and is attempting to undermine Medicare. Cotton’s insurance experience is limited to consulting work for a federal agency.

Last week, we fact-checked an ad from Senate Majority PAC that claimed Cotton, who’s running for Senate in Arkansas, “got paid handsomely working for insurance companies.” Now, Patriot Majority USA, a 501(c)(4) that is allied with Senate Majority PAC, is airing an ad that says Cotton once “bragged about his insurance industry experience” on his website “but now it’s been removed.” Cotton’s Senate campaign website has never claimed he had insurance industry experience. His Facebook page mentions consulting work that was done for a federal agency, not insurance companies.

Last week’s Senate Majority PAC ad made the old claim that Cotton wants to “end Medicare’s guarantee,” costing seniors “$6,000 more a year.” The new ad from Patriot Majority claims Cotton backed a plan that could “cost seniors up to 1,700 more a year.” The plan Cotton supported would take away discounts and increased coverage of prescription drugs. But the claim pertains to a small percentage of seniors on Part D prescription drug plans.

Still Nothing to Insurance Industry Claim

The ad makes an issue of Cotton’s so-called ties to the insurance industry, claiming that Cotton once “bragged about his insurance industry experience” on his website, “but now it’s been removed.”

This is a new twist on the Senate Majority PAC ad’s claim that, “Before Congress, Cotton got paid handsomely working for insurance companies and corporate interests.” As the Washington Post‘s Glenn Kessler, aka the FactChecker, noted via Twitter, that ad, titled “Connect the Dots,” won the “fact checker trifecta” with FactCheck.org, PolitiFact and Kessler all pointing out that there was no evidence that Cotton did work for insurers. His only established connection to the industry involved consulting work for the Federal Housing Administration.

The thin piece of evidence for the Senate Majority PAC’s claim came from Cotton’s Facebook “about” page. Here’s a screen grab of what it says:

FB

As our reporting uncovered, that insurance experience amounted to consulting work done on behalf of the Federal Housing Administration to help its Office of Multifamily Housing Programs better manage its backlog. Any money that McKinsey — where Cotton was a consultant — made from the FHA project would have ultimately come from the federal government, not from private insurance companies. And so, we concluded, the insinuation that Cotton’s time at McKinsey gave him ties to the insurance industry — that are now influencing his views on Medicare — was simply misplaced.

There’s nothing new in the latest ad from Patriot Majority to back up the claim about Cotton’s ties to the insurance industry. However, the ad says that a reference to insurance industry experience was once proudly displayed on Cotton’s website, “but now it’s been removed.”

Patriot Majority notes that Cotton’s biography on his congressional campaign website on May 25, 2012, (retrieved via the Internet Archive Wayback Machine) used the identical language as is found on Cotton’s Facebook page now. Cotton’s biography on his current Senate campaign website, however, does not. Here’s a screen grab of the pertinent section of the biography on the Senate campaign website:

CottonAbout

In other words, there’s no list of Cotton’s “industry experience.” So, did Cotton’s campaign remove the “insurance” reference on the campaign Web page? We also went to the Internet Archive Wayback Machine and could not find that the language was ever used on Cotton’s Senate campaign website. The biography on the Senate campaign website is shorter than the one on the House campaign website from two years ago (220 words compared with 372). Also left off from the congressional campaign website was the fact that Cotton enjoys running marathons. Was that also suspiciously “removed”?

The ad says Cotton wants us to “forget” that he once “bragged about his insurance industry experience” on his website. If that’s the case, Cotton isn’t doing a very good job. That same descriptive paragraph mentioning “insurance” remains on his Facebook page.

The Medicare Meme

In what has become another theme of the Arkansas Senate race, the Patriot Majority ad criticizes Cotton for supporting the House GOP budget proposed by Rep. Paul Ryan. Specifically, it attacks Cotton for what Ryan’s plan would do to Medicare. The ad says: “Cotton pushed a plan that would undermine Medicare’s guarantee. And could cost seniors up to 1,700 more a year.”

In Ryan’s premium-support plan, seniors would choose either traditional Medicare or a private insurance plan purchased with a subsidy sent to the insurer. Critics say that the plan would “undermine” traditional Medicare. That’s debatable. Supporters of the plan say risk-adjustment measures would guard against the situation opponents predict: traditional Medicare becoming too expensive, because it was filled with older and sicker beneficiaries. We’ve explained the policy debate before.

As for the “up to” $1,700 claim, viewers would have to pay attention to the on-screen graphic to see that it’s referring to prescription drugs. The announcer doesn’t say that, but text on the screen reads: “Costing seniors up to $1,700 more on prescriptions.” As we’ve said before, the Ryan plan would increase costs for some — but not all — seniors because it repeals a provision of the Affordable Care Act that lowered prescription drug costs for some seniors. The Republican House budget would do away with the ACA provision that slowly closes the so-called “doughnut hole” in Medicare Part D prescription drug coverage.

But not all seniors reach the “doughnut hole” gap in coverage; in fact, most do not. Here’s how the gap works: Medicare covers prescription drug costs, minus a deductible and co-pays, until total costs reach $2,850 for the year for a beneficiary, in 2014. A beneficiary would then have to pay the full drug costs out of pocket until total out-of-pocket expenses reach $4,550. At that point, a senior’s drug costs are again covered, minus a 5 percent co-pay. The full cost of this gap in coverage for a beneficiary would be $1,700, the figure the ad uses.

The ACA now offers discounts on drugs purchased in that gap and slowly closes the doughnut hole until it’s gone in 2020. At that point, drug costs that previously fell in the gap would be covered, but seniors would have a 25 percent co-pay.

Seniors could face some higher costs under the ACA provision, too. The nonpartisan Congressional Budget Office has said that “the premiums paid by beneficiaries will increase slightly” under the ACA because drug manufacturers would increase prices slightly to compensate for the discounts they must provide. CBO still said that seniors who reach the gap in drug coverage “will probably pay less for their drugs overall.”

And by 2020 that gap in drug coverage could be wider than $1,700, if the ACA provision were to be repealed. The Department of Health and Human Services estimated in a 2012 report that beneficiaries who reached the doughnut hole would save an average of $1,734 in 2020 and $1,969 in 2022 due to the closing of that coverage gap.

Whatever the true figure is, only the seniors who completely spanned that gap stand to gain the most under the ACA, and lose the most under the Ryan plan.

As of 2013, 35.7 million seniors had Part D drug plans. How many seniors does the doughnut hole affect? A spokesperson at the Centers for Medicare & Medicaid Services told us 4.3 million beneficiaries received discounts while in the coverage gap in 2013. So they’d pay something more under the Ryan plan.

How many would have completely surpassed the doughnut hole? According to a March 2014 MedPAC report to Congress (see pages 365-366), only 8.4 percent of enrollees in 2011 — slightly more than 2.6 million seniors — completely surpassed the gap, reaching what’s called the “catastrophic phase,” where coverage kicks in again. Most of those, however, received a low-income subsidy that “effectively eliminates the coverage gap,” MedPAC says. Slightly more than 500,000 did not receive the low-income subsidy and faced the full brunt of the coverage gap. That’s less than 2 percent of all those on Part D plans, using 2011 numbers.

Those figures may well be higher today simply due to more beneficiaries being on Part D plans. It’s also possible that some seniors have avoided the coverage gap in the past by reducing or changing their medications, so more could potentially benefit from the ACA — or pay more under the Ryan plan — than these numbers indicate. The nonpartisan Kaiser Family Foundation’s research has revealed that those who hit the gap reduce their prescription drug use, likely because they want to save money. The AARP provides a “doughnut hole calculator” on its website that helps seniors figure out if they’ll hit the gap and provides a list of alternative, cheaper medications that they could possibly get to reduce their spending.

Repealing the closing of the doughnut hole would raise drug costs for some seniors. The Obama administration’s most recent estimate is that 7.9 million seniors, and those with disabilities, had saved $9.9 billion on prescription drugs since the law’s enactment. For 2013, the average drug discount per beneficiary was $911. In Arkansas, 35,535 beneficiaries saved an average of $737 for the year, according to the administration’s figures.

Beneficiaries should save more as the gap is closed, and those savings would disappear under the Ryan plan. But those savings, and Patriot Majority’s claim, would affect only a small percentage of seniors.

– Robert Farley and Lori Robertson

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Rand Paul’s Supply-side Distortion http://www.factcheck.org/2014/04/rand-pauls-supply-side-distortion/ Thu, 17 Apr 2014 15:11:59 +0000 http://www.factcheck.org/?p=83945 Kentucky Sen. Rand Paul claimed that 20 million jobs were created after President Ronald Reagan’s dramatic tax cuts in the 1980s, and that this was the “last time” such job growth took place. Paul is wrong on both counts.

The fact is that the economy added just over 16.1 million jobs under the tax-cutting Reagan, but it added nearly 22.9 million under Democratic President Bill Clinton, who raised taxes.

Supply-side Myth

Paul’s misinformed recitation of economic history came during an April 12 “Freedom Summit” gathering of 2016 Republican presidential prospects in Manchester, N.H. It was a straightforward expression of the supply-side myth that tax cuts produce more revenue rather than less:

Paul, April 12: When is the last time in our country we created millions of jobs? It was under Ronald Reagan. What did Ronald Reagan do? Did he come forward and say: “Oh, let’s just cut taxes for low-income people?” No, he said forthrightly let’s cut everyone’s taxes. He did dramatically. The top rate — that’s what rich people pay — was 70 percent, he lowered it to 50 percent. Then he lowered it again to 28 percent, and 20 million jobs were created. More revenue came in in fact. When you cut rates people work harder, they make more money, more revenue comes in.

Paul was right about the size of Reagan’s dramatic cuts in the federal income tax rate. When Reagan took office in 1981, the top rate was 70 percent of income exceeding $108,300 for singles and $215,400 for couples filing jointly, and during his final year in office, the top rate was just 28 percent on income exceeding $17,850 for singles and $29,750 for couples filing together.

And it’s also true that those tax cuts were accompanied by years of prosperity. The 16.1 million jobs added during his eight years in office came despite a 16-month recession that began early in his first term, before the tax cuts enacted in 1981 began to take effect. But even ignoring the jobs lost during the early part of his time in office, the economy gained only 18.4 million jobs from the low point in December 1982 to the end of his presidency. That’s an enviable number, but it’s still well short of Paul’s “20 million” claim.

And it’s not the “last time” such gains were made, either. Clinton took office in 1993 during a weak recovery from an eight-month recession that plagued the middle of Republican George H.W. Bush’s term.

To reduce the huge federal deficits — records for the time — that he had inherited from Reagan and Bush, Clinton pushed through a tax increase (and some spending cuts) in 1993. Afterward, the deficits shrank, the recovery accelerated, and it continued until the end of his presidency, becoming what is still the longest sustained economic boom in the nation’s history.

During Clinton’s eight years, the economy added far more jobs than were added under Reagan, or even the combined total under both Reagan and the elder Bush, for that matter. Clinton’s total of 22.9 million in eight years easily exceeds the 18.8 million added in the 12 Reagan-Bush years. (For a discussion of all the factors involved, see our Dec. 7, 2007, Ask FactCheck item, “Clinton and Economic Growth in the ’90s.”)

Tax Cuts = More Revenue?

Another dubious claim by Paul is that “more revenue came in” after Reagan cut taxes. As we’ve often noted, when politicians say “more” or “less,” it’s always a good idea to ask, “compared with what?”

The plain fact is, revenue fell by $17 billion, or 2.8 percent, during fiscal year 1983, which was the first full fiscal year during which the 50 percent top federal income tax rate was in effect.

Furthermore, that drop came despite the fact that the recession of 1981-82 (when unemployment hit what is still a record 10.8 percent) was ravaging the economy during all of the previous fiscal year, and a recovery commenced two months after the start of FY 1983. (Fiscal years start Oct. 1 of the preceding calendar year.) Normally, recoveries bring increases in revenues, not declines.

Later, the government did see impressive increases in revenue — 11 percent in FY 1984 and 10.1 percent in FY 1985, for example. But would those increases have been even greater had rates not been reduced, or been cut less? It’s not possible to re-run history, so nobody can say for sure.

At the time the 1981 act was passed, however, the nonpartisan Joint Committee on Taxation projected an average revenue loss of more than $111 billion per year over the first four years the cuts were in effect — compared with what was projected under the old rates. That’s noted in a document we’ve cited before, “Revenue Effects of Major Tax Bills,” compiled by a career tax analyst in the Treasury Department.

Economists generally agree that lower taxes stimulate economic activity. But contrary to what Rand claims, they say tax cuts just don’t produce enough revenue to pay for themselves, let alone bring in increased revenue. For more on that, see our Jan. 16, 2008, item, “The Impact of Tax Cuts.”

And again, Paul is simply falsifying evidence when he claims far more job growth under Reagan than actually took place, and when he says the Reagan years were the “last time” such growth occurred.

– Brooks Jackson

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False Tax Claims http://www.factcheck.org/2014/04/false-tax-claims/ Tue, 15 Apr 2014 21:37:04 +0000 http://www.factcheck.org/?p=83907 Q: Did Democrats increase federal income tax rates in 2014 under Obamacare?
A: No. Tax increases mentioned in a viral email went into effect a year earlier, as part of a budget deal supported by many Republicans as well as most Democrats.

FULL QUESTION

Is this information correct? I have tried to check it out but get terribly confused.
It came as an email from a friend in Colorado.

Viral email: THE FIRST THREE MONTHS!
Happy New Year America
Here is what happened on January 1st 2014:

Top Income Tax bracket went from 35% to 39.6%
Top Income Payroll Tax went from 37.4% to 52.2%
Capital Gains Tax went from 15% to 28%
Dividend Tax went from 15% to 39.6%
Estate Tax went from 0% to 55%

Remember this ‘fact;’ if you have any money, the Democrats want it! All these taxes were passed with only Democrat votes. Not one Republican voted to do these taxes. Remember this come election time. And make sure your friends and neighbors know this info too!

 These taxes were all passed under the affordable care act, otherwise known as Obama care.

FULL ANSWER

We started getting dozens of queries about this one about three weeks before tax filing day. It’s nonsense. Some of these figures aren’t accurate, and none of these increases took effect on Jan. 1, 2014, or had anything to do with the Affordable Care Act. And the claim that “not one Republican voted to do these” is false.

Here’s what really happened, and when:

  • The top income tax rate went back up to 39.6 percent over a year ago — for singles making more than $400,000 a year or couples making more than $450,000. The increase was part of the “fiscal cliff” package that Congress passed on New Year’s Day of 2013.
  • Capital gains rates also increased in 2013 under the same “fiscal cliff” deal — but not nearly as much as this email claims. For long-term gains (on assets held more than one year) the top rate went from 15 percent to 20 percent (not 28 percent), and also applied to individuals making more than $400,000 and couples earning more than $450,000.
  • The top rate for dividends also went up to 20 percent (not 39.6 percent) in 2013 as part of the same fiscal cliff package, and also only for those with more than $400,000 individual or $450,000 joint taxable income.
  • It’s true that the estate tax was once effectively zero percent — but only for people who died in 2010, not last year. The top rate went back up to 35 percent for those who died the following year, and (under the fiscal cliff deal) to 40 percent for those who died in 2012 and thereafter. Furthermore, the rate is still zero percent for any individual who dies this year and whose estate is valued at less than $5,340,000. The threshold for filing an estate-tax return was set at $5 million in 2011, and is indexed for inflation each year.
  • The claim that the fiscal-cliff tax increases were “passed with only Democratic votes” is false. The deal passed by a vote of 89-8 in the Senate (including 40 Republican votes in favor) and by a vote of 257-167 in the House (with 85 Republican votes in favor). The package made permanent the 2001 Bush tax cuts for all but very high-income earners, avoiding tax increases that otherwise would have taken effect Jan. 1, 2013, when the “temporary” Bush tax cuts were scheduled to expire.

The email’s claim about “income payroll tax” is a head-scratcher, since no tax expert we know of uses such a term. Our best guess is that the anonymous author meant to refer to the combined effect of the federal income tax and the Social Security and Medicare payroll taxes, and did not understand how these taxes work. No combination of payroll and federal income taxes would produce a top marginal rate of 52.2 percent, so far as we can figure.

Back in 2008, when Obama was first running for president, conservative commentator Larry Kudlow claimed that Obama’s tax proposals would amount to “a 52.2 percent combined income and payroll tax.” But even that claim was wrong, because of the simple fact that the top marginal income-tax rate applied at that time only to income above $349,701 and Social Security taxes applied only to wage or salary income below $97,500. Any income taxed at the top income-tax rate would incur zero Social Security tax.

And the same is true today: Taxable Social Security wages now stop at $117,000, and the top marginal income-tax bracket doesn’t kick in until $406,751 for singles and $457,601 for joint filers. All of these levels are adjusted for inflation each year.

Having said all that, we’ll note that taxes have gone up for some as a result of Obamacare. The law imposes a 3.8 percent tax on net investment income that applies to people who earn more than $200,000 a year for singles, or $250,000 for joint filers. It also levies an additional Medicare tax of 0.9 percent on wages, salaries and self-employment income for people in those income groups. However, these changes also took effect in 2013, not 2014.

– Brooks Jackson

Sources

Tax Foundation. “U.S. Federal Individual Income Tax Rates History, 1862-2013 (Nominal and Inflation-Adjusted Brackets).” 17 Oct 2013.

Hollander, Catherine. “Here’s What’s in the Fiscal-Cliff Deal.” National Journal. 1 Jan 2013.

Fidelity Brokerage Services. “A taxpayer’s guide to 2013.” 27 Feb 2013.

Ruffenach, Glenn. “Navigating the Dividend Storm; Tax rates on corporate payouts are heading higher for some. Don’t just sit there.” Wall Street Journal. 10 Jan 2013.

Cook, Douglas C. “Current & Historical Federal Estate Tax Structure, Exemptions & Rates.” Cook & Cook law firm website. 17 Dec 2012.

U.S. Internal Revenue Service. “Estate Tax” Web page. 9 Apr 2014.

U.S. Senate Roll Call Votes 112th Congress – 2nd Session. “On Passage of the Bill (H.R. 8, As Amended ).” 1 Jan 2013.

U.S. House of Representatives. “Final Vote Results for Roll Call 659.” 1 Jan 2013.

Kudlow, Larry. “Obama’s Big-Government Vision.” National Review Online. 14 Feb 2008.

Social Security Administration. “Contribution and benefit bases, 1937-2014.” Undated Web page accessed 15 Apr 2014.

Internal Revenue Service. “Questions and Answers on the Net Investment Income Tax.” 5 Mar 2014.

Internal Revenue Service. “Affordable Care Act Tax Provisions.

Internal Revenue Service. “Questions and Answers for the Additional Medicare Tax.”

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Obamacare Ad Onslaught http://www.factcheck.org/2014/04/obamacare-ad-onslaught/ Fri, 11 Apr 2014 21:54:30 +0000 http://www.factcheck.org/?p=83717 Since 2009, it has been a campaign tradition: Election cycles filled with ads about the Affordable Care Act — and overwhelmingly ads attacking the law and those who support it. The 2014 midterm election could be even more intense, with an onslaught of advertising that rivals several years’ worth of anti-ACA spending.

Kantar Media Intelligence’s Campaign Media Analysis Group, which tracks political ad spending, found that $500 million had been spent on advertising about the health care law from 2009 through mid-2013. It expected another $500 million to be spent by late March 2015, the five-year anniversary of the law. That’s the same amount of spending in roughly half the time. Going forward, we could see more pro-ACA ads than we have in the past — President Obama proudly boasted on April 1 of the sign-ups on state and federal marketplaces, after all. But Kantar’s earlier tracking saw critics outspending proponents by a margin of 5 to 1.

Those numbers haven’t been updated since last summer, but Elizabeth Wilner, a senior vice president at Kantar, told us in an email: “The political ad spending continues to be overwhelmingly — really almost exclusively — tilted toward negative ads than positive ones.”

Indeed, when we sorted through ads picked up by Kantar since January, we found only a few supporting the law among a slew of attack ads criticizing it, most of which came from one group — Americans for Prosperity, the conservative advocacy group founded by billionaire businessman David Koch. The Cook Political Report called Americans for Prosperity “the most prolific advertiser of the 2014 cycle.” AFP TV spots in House and Senate races from January 2013 through late March 2014 were more than double the number of spots from Senate Majority PAC and House Majority PAC, the leading Democratic outside-spending groups, as this graphic from Kantar shows.

The few pro-ACA ads we found did come from Senate Majority PAC. But its advertising has been drowned out by the deluge from AFP. As of March 22, AFP had aired more than 14,000 spots in nine Senate races and more than 4,000 in nine House races, according to Kantar. Not all of those are anti-Obamacare ads, but much of the group’s advertising has focused on the law.

Whether the ads come from groups like AFP or congressional candidates, many of the TV spots about the health care law make general, and misleading, claims about “millions” losing insurance, premiums “skyrocketing,” or families “hurting.” And we’re still seeing claims about a government takeover of health care, despite the fact that the law brings new business to private insurance companies and won’t lead to universal coverage.

We’ve written about these types of claims before. Many times. But with the ad avalanche continuing — and perhaps intensifying as the November midterm election approaches — we’ve summarized our previous findings and updated them with the most recent research on these common lines of attack.

For more on the onslaught of Obamacare ads, see these stories in “Party Lines” — a FactCheck.org feature on misleading talking points:

‘Millions’ Lost Insurance

‘Skyrocketing’ Premiums

ACA ‘Hurting’ Families

Government-Run Health Care

– Lori Robertson

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Government-Run Health Care http://www.factcheck.org/2014/04/government-run-health-care-2/ Fri, 11 Apr 2014 21:50:28 +0000 http://www.factcheck.org/?p=83761 Party Lines Red InsertThe Line: The Affordable Care Act puts the government between you and your doctor.

The Party: Republican

Those “government-run” health care claims were once so ubiquitous we called them a “mantra.” They’ve died down considerably, but we’re still seeing them in 2014 congressional races. The Affordable Care Act doesn’t create a government-run system, in which the government provides health insurance, or care, to residents. It does expand Medicaid, and also boosts business for private insurers, by about 12 million customers over the next decade, and leaves intact work-based insurance on which most Americans have long relied.

An ad from Florida House GOP candidate Curt Clawson says: “You and your doctor, it’s an important relationship. But Obamacare created a trillion-dollar mountain of government between patients and physicians.”

 

And in an ad about how Washington is broken, Oklahoma Senate candidate T.W. Shannon says future generations will inherit “a health care system run by bureaucrats, not doctors and patients.”

 

As we’ve said before, the law’s regulatory provisions are more like putting the government between you and your insurance company. The ACA says insurers can’t have caps on coverage, can’t deny customers based on preexisting conditions (or charge them more), and can’t spend more than 15 percent or 20 percent on non-medical-related costs. It also requires coverage of preventive care, such as cancer screenings, with no cost-sharing.

The law doesn’t create a single-payer system, in which the government insures everyone. In fact, while the law is expected to cut the number of uninsured Americans by 25 million, it still leaves 31 million uninsured.

Republicans also have repeatedly attacked the Independent Payment Advisory Board as a bureaucrat-filled rationing board. But the IPAB, which is created by the health care law, is charged with slowing the rate of growth of Medicare spending, and it’s limited in how it can go about doing that. The law says the board’s proposals “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.” The IPAB is made up of medical professionals, health care experts, economists and consumer representatives, not bureaucrats.

– Lori Robertson

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ACA ‘Hurting’ Families http://www.factcheck.org/2014/04/aca-hurting-families/ Fri, 11 Apr 2014 21:50:01 +0000 http://www.factcheck.org/?p=83755 Party Lines Red InsertThe Line: The Affordable Care Act is hurting families.

The Party: Republican

Several ads attacking the Affordable Care Act make the general claim that the law is “hurting” families. It’s true that some who bought their own insurance on the individual market could end up paying more. But millions of uninsured families will gain coverage under the law, many of them through free or low-cost Medicaid or Children’s Health Insurance Program coverage. And millions of insured families will get federal subsidies to help pay for coverage.

The “hurting families” claim has been a tagline on several Americans for Prosperity ads, including ones against Rep. Gary Peters of Michigan and Rep. Bruce Braley in Iowa. A March ad from Republican Sen. Thad Cochran in Mississippi also says, “Sen. Thad Cochran understands Obamacare hurts our families.” An ad from Senate candidate Sid Dinsdale in Nebraska features a small-business owner saying of Dinsdale: “He understands how Obamacare and regulations hurt our families.”

In January, an Americans for Prosperity ad attacking Arizona Rep. Ron Barber said the ACA “means higher costs for struggling families.” And in another version of the struggling-families theme, Senate candidate Paul Hollis attacked Sen. Mary Landrieu in Louisiana in an ad, saying that families in the state deserve better than “the high premiums, large deductibles and canceled policies of Obamacare.”

 

As we’ve explained before, some Americans who buy their own insurance will pay more, and some will pay less, depending on the individual. So, some families could be “hurt” or “struggling,” while others are helped with lower costs. How many? We don’t know.

But we do know that millions of uninsured families will gain coverage under the law — the nonpartisan Congressional Budget Office estimates that there will be 25 million fewer uninsured Americans due to the ACA as early as 2016. And many — 12 million — will gain free or low-cost Medicaid or Children’s Health Insurance Program coverage. (Research by the Urban Institute and RAND Corp. indicates that millions of the previously uninsured have already gained coverage.)

Those with adult children also could benefit from the law’s provision allowing dependents up to age 26 to be on their parents’ plan (the administration estimates 3 million young adults have gained coverage because of that requirement). Others will save money on insurance through subsidies, which are available to a family of four buying its own coverage and earning between $23,850 and $95,400 (that’s between 100 percent and 400 percent of the poverty level).

For instance, in Arizona, where the AFP ad said that “struggling families” were facing “higher costs,” the Medicaid expansion would provide insurance to an additional 240,000 Arizonans, as estimated by Republican Gov. Jan Brewer, and enable the state to continue Medicaid coverage for 50,000 adults without children in their homes. An additional 210,000 residents who were previously eligible for Medicaid are expected to sign up now, prompted by the law, as estimated by the Kaiser Family Foundation.

The expansion makes Medicaid available to those earning up to 138 percent of the federal poverty level, which is $32,913 for a family of four. The eligibility level pre-ACA varied by state.

Louisiana, Mississippi and Nebraska are among the 19 states that have decided not to expand Medicaid under the law. But even there, KFF estimates that 58,000, 57,000 and 20,000 residents, respectively, would newly join Medicaid. These folks would have been eligible previously but will now sign up, likely prompted by news of the law and the individual mandate to have insurance or pay a fine. If the states do decide to expand Medicaid, KFF estimates 398,000 would be added to the rolls in Louisiana, 231,000 in Mississippi, and 88,000 in Nebraska. More than half of the uninsured in Louisiana and Mississippi earn 138 percent of the poverty level or less. In Nebraska, 26 percent to 47 percent of the uninsured are in that category.

Those who qualify for subsidies in 2014 to buy their own coverage on the exchanges include an estimated 313,000 in Arizona, 344,000 in Louisiana, 204,000 in Mississippi, and 122,000 in Nebraska, according to KFF estimates. Qualifying for subsidies, however, doesn’t necessarily mean their costs would be lower than what they had been paying for insurance before. The subsidies are on a sliding scale, and are based on a maximum percentage of income that individuals would pay for a benchmark plan where they live.

For instance, those earning 100 percent of the poverty level would pay a maximum of 2 percent of their income for insurance, with subsidies making up the difference, while those earning up to 400 percent of the poverty level pay a maximum of 9.5 percent of their income. The Kaiser Family Foundation further explains: “If the premium that a person or family faces for the benchmark plan in their area is higher than the maximum percent of income defined in the law for their income, they are eligible for a tax credit and the tax credit is equal to the difference between the premium for the benchmark plan and the defined percent of their income. The benchmark plan is the second-lowest-cost plan in the silver cost-sharing tier offered through the marketplace for the area where they live.”

It’s a bit complicated. A family of four earning $90,000, then, would pay a maximum of $8,550 for the year for the second-cheapest “silver” plan, or $713 per month. On HealthCare.gov, we found cheaper insurance — $562 per month — for a bronze-level plan for a hypothetical family of four (nonsmokers) living in Adams County in southwest Mississippi. The second-lowest-cost silver plan, with a lower deductible, was $715 per month, after subsidies. (The KFF subsidy calculator showed similar results.)

Whether any of that is a good deal depends on the family and various individual factors — such as health status and the coverage it had before. It’s just one example of how blanket statements about “struggling” or “hurting” families attempt to paint the law in black and white when reality isn’t so clear-cut.

One more example: We recently fact-checked another AFP ad in which a Michigan mother says that her family’s “new plan is not affordable at all” and that the law is “destroying the middle class.” But we found her situation is an example of how families can benefit from the law. The Michigan family of seven could have selected a cheaper exchange plan, as opposed to the unsubsidized private plan it chose, but the family did not want the children to be on the Children’s Health Insurance Program.

– Lori Robertson

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‘Skyrocketing’ Premiums http://www.factcheck.org/2014/04/skyrocketing-premiums/ Fri, 11 Apr 2014 21:49:00 +0000 http://www.factcheck.org/?p=83743 Party Lines Red InsertThe Line: Premiums and health care costs are ‘skyrocketing’ under the Affordable Care Act.

The Party: Republican

Several anti-Obamacare ads have made the claim that premiums or health care costs have gone up under the law. And “skyrocketing” is the word of choice in these attack ads. That’s misleading. Premiums for those who buy their own private insurance will go up or down, in some cases significantly, depending on individual circumstances. Employer-sponsored premiums, where most Americans have coverage, are not “skyrocketing,” and neither are health care costs. In fact, the growth of both has been at historically low rates in the past few years.

Three Americans for Prosperity ads in January used the word, including an ad against Michigan Rep. Gary Peters that said, “Families are losing their doctors and health care costs are skyrocketing.”

 

An AFP ad against Sen. Mary Landrieu of Louisiana said that “millions of Americans have lost their health care and millions more are facing skyrocketing costs.”

 

A third ad, this one against Iowa Rep. Bruce Braley, said, “Our plans canceled. Our doctors lost. Our premiums skyrocketing.”

 

And that’s not all. Another AFP ad supporting Montana Rep. Steve Daines said the congressman opposed Obamacare and “fought against rising health care costs.” Another ad against Sen. Jeanne Shaheen in New Hampshire said that “families are paying more for expensive health plans.”

Most Americans — 48 percent of the population — have insurance through their workplaces. Employer-sponsored premiums for family plans went up 3.8 percent on average in 2013, according to the Kaiser Family Foundation’s annual employer health benefits survey. Since the ACA was passed in 2010, those premiums have gone up 5.9 percent on average per year, while in the five years before the ACA, premiums went up 4.8 percent on average per year. Not exactly “skyrocketing.”

Overall national health care spending is growing at historically low rates. President Obama has boasted that “health care costs overall are actually going up more slowly over the last three years than in the last 50,” which is true. From 2009 to 2012, the growth has been under 4 percent per year. Drew Altman, CEO of the Kaiser Family Foundation, wrote in September 2012 of the slow recent growth in both premiums and spending: “These are strikingly low numbers to those of us who have been studying health costs for a long time.”

But, as we’ve pointed out a few times, experts, including those at KFF and the Centers for Medicare & Medicaid Services, say that’s mainly due to the slow economy. The ACA could be having some indirect impact, though, as Altman explained in a September 2013 column.

As more Americans gain insurance, and the general population increases, health care spending overall will go up. But costs per individual won’t necessarily go up; they’ll vary. National health care spending includes all spending on health care, by individuals, businesses, insurers, and the government.

A small increase in work-based premiums can be linked directly to the ACA. When family premiums jumped 9 percent from 2010 to 2011, experts told us that the law was responsible for a 1 percent to 3 percent increase, with the remainder due to higher medical costs. At the time, the law had required the elimination of preexisting condition exclusions for children, the coverage of dependents on their parents’ plans up to age 26, free coverage of preventive care, and the increase in caps on annual coverage.

It’s the individual market, where people buy their own coverage, and small-employer market that face the major changes under the law. And that’s where premiums can go up or down, perhaps significantly, depending on the individual. It’s difficult to draw general conclusions about what’s happened to people’s premiums in the volatile individual market, where policyholders frequently switch plans or leave the market. And it may remain difficult in the years to come. Five percent of Americans — about 15.8 million people — bought their own private insurance on this market in 2012, according to the Kaiser Family Foundation.

The market has seen great variation in pricing and the level of benefits offered. This makes it “difficult, if not impossible, to make generalized statements of the effect of the new law on premiums,” Linda J. Blumberg, a senior fellow with the Urban Institute’s Health Policy Center, wrote in a July 2010 report. And experts say that’s still the case.

In a September 2013 report, KFF said the changes in the market because of the law — such as essential health benefit requirements and no denial or price variation based on health status — “make direct comparisons of exchange premiums and existing individual market premiums complicated, and doing so would require speculative assumptions and data that are not publicly available.”

From 2009 to 2010, the average increase in individual market premiums, for those who had such coverage for more than a year, was 15 percent, according to a Kaiser Family Foundation survey. That’s five times the average increase for employer-sponsored family plans that year, and three times the average increase of employer plans for the five years before the ACA.

But premiums can vary state to state, with different state regulations, and person to person, as insurers were able to price based on medical conditions and gender. Under the ACA, insurers on the individual and small-group market are limited to pricing premiums based on family size, geography and, to a limited extent, age and tobacco use. Insurance companies also can’t deny coverage based on preexisting conditions.

That’s a major change in how those policies are priced. The obvious implication is that those with health conditions could well pay less in premiums than they did when their health was a cost factor. And the reverse is likely true: Healthy individuals could end up paying more. (For example, one Arizona man who has leukemia had been paying $855 per month for a single policy on the individual market; last fall he was able to find a cheaper plan. But his previous premium was also very expensive: In 2010, the Arizona per person per month average was $241, according to KFF. That means some would have had significantly cheaper plans than this man to begin with, and so, they may not have saved money with new insurance.)

The change in price would depend on what type of coverage one had before: Bare-bones plans have to be upgraded with more generous benefits and limits on out-of-pocket costs. Those added benefits may be welcomed by some and scorned by others who preferred a cheap plan with fewer benefits. The ACA requires individual market and exchange plans to include essential health benefits, including maternity coverage, prescription drug coverage and preventive care benefits. More generous benefits do cost more, and unless those moving to more generous plans also received subsidies, they probably paid more.

The other factor that impacts total out-of-pocket costs is whether one qualifies for federal subsidies, available to those earning up to 400 percent of the federal poverty level, which is $46,680 for a single person. The nonpartisan Congressional Budget Office has estimated that 80 percent of those buying policies on the exchanges — which would include at least some who previously bought their own insurance as well as those who didn’t have insurance — will qualify for subsidies, with an average subsidy of $4,700 in 2014.

So, are premiums “skyrocketing”? Overall, no. But some individuals who buy their own insurance could face significantly higher rates, depending on their health status, previous plan and other factors. Other individuals — particularly those with health conditions and those who qualify for subsidies — could pay less.

A series of Americans for Prosperity ads also claims that “millions are paying more and getting less,” a reference to those who had their individual market policies canceled because they didn’t meet the law’s requirements. But there’s no evidence of that, either.

A few of the personal stories that Americans for Prosperity has mentioned or highlighted in other ads show that some who were on the individual market are paying less. But while some will find better coverage and better deals on the exchanges — particularly if they qualify for subsidies — it’s certainly true, as we’ve said, that not everyone will come out on the “winning” side.

But “paying more and getting less”? We can’t say that there aren’t some individual cases that might fit such a description, and whether one gets “less” can be a subjective call. But there’s no evidence that “millions” are in such a predicament.

The millions of uninsured who are expected to gain coverage under the law may or may not pay “more,” depending on their medical costs and subsidy status. But they’re certainly not “getting less.”

– Lori Robertson

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‘Millions’ Lost Insurance http://www.factcheck.org/2014/04/millions-lost-insurance/ Fri, 11 Apr 2014 21:47:39 +0000 http://www.factcheck.org/?p=83726 Party Lines Red InsertThe Line: Millions of people have lost their health insurance and their doctors because of the Affordable Care Act.

The Party: Republican

President Obama gave ad-makers plenty of fodder last year when his promise — “If you like your health care plan, you can keep your health care plan” — clearly was proven false. We had said years earlier that Obama couldn’t make that promise to everyone, but the claim made headlines when Americans received cancellation notices for individual market plans that no longer met the law’s requirements.

Critics of the law now say millions lost their health insurance. But that’s misleading. Those individual market plans were discontinued, but policyholders weren’t denied coverage. And the question is, how many millions of insured Americans had plans canceled, and how does that compare with the millions of uninsured Americans who gained coverage under the law.

There is evidence that far more have gained coverage than had their policies canceled.

The conservative Americans for Prosperity has made the canceled policies a theme in its advertising. In one series of ads, a soft-spoken woman says: “Millions of people have lost their health insurance. Millions of people can’t see their own doctors.” That ad, which aired in February and March, targets Democratic senators in three states: Sens. Mark Udall in Colorado, Mary Landrieu in Louisiana and Mark Pryor in Arkansas. The ad aired against Sen. Kay Hagan in North Carolina in November, and it’s also been used to target a few House members.

Another AFP ad targeting Landrieu — and airing in January — said that “millions of Americans have lost their health care.”

It’s true that insurance companies discontinued health plans that had covered millions of people who had bought them directly rather than through an employer. That’s because those plans didn’t meet the coverage standards of the new law.

But those policyholders didn’t lose the ability to have insurance. In most cases, insurers offered them an alternative plan, though there were some instances of companies exiting the individual market altogether.

Whether offered an alternative or not, individuals could shop for insurance on the federal and state marketplaces, or through a broker or insurance carrier directly. Many were likely eligible for federal subsidies to help pay for insurance, resulting in better coverage and lower rates for some. But the specific plan they had was indeed discontinued. (More than half of those with canceled policies were likely to be eligible for federal assistance, according to Urban Institute research, and about 80 percent of all those buying plans on the exchanges are expected to qualify for subsidies, according to the Congressional Budget Office.)

How many individual market cancellations were there?

The most commonly used figure is 4.7 million, based on reporting by the Associated Press last December. But there’s reason to doubt the accuracy of that figure. An analysis of a more recent poll by researchers at the Urban Institute puts the figure at somewhere around 2.6 million.

An AP story that ran Dec. 26 said that “at least 4.7 million Americans received the cancellation notices,” and gave state-by-state figures for the “number of policies scheduled to be canceled.”

But the news agency didn’t say exactly how it arrived at the other figures that went into the 4.7 million total, making the reporting impossible for outsiders to verify. In three states, the figures appear to be inflated. Washington state’s insurance commissioner, for example, has publicly stated that the AP’s figure of 290,000 discontinued policies in that state is “inaccurate.” In a news release on his official website, Insurance Commissioner Michael Kreidler said that there were only 278,000 total in the individual market at the end of September. Recent reports by our fact-checking colleagues at Politifact.com and the Washington Post show the numbers were too high in Florida and Kentucky.

And now, new research also gives reason to think the AP estimate may be inflated.

In a March 3 posting on the website of the journal Health Affairs, two researchers from the Urban Institute analyzed findings from a nationwide poll and said, “Our findings imply that roughly 2.6 million people would have reported that their plan would no longer be offered due to noncompliance with the ACA.” And in this case, the methodology is made explicit.

In December 2013, the Urban Institute’s quarterly Health Reform Monitoring Survey of adults ages 18-64 included this question: “Did you receive a notice in the past few months from a health insurance company saying that your policy is cancelled or will no longer be offered at the end of 2013?” And of the 522 people polled who were covered by non-group policies, 18.6 percent said yes, their old plan would no longer be offered because it didn’t meet the new coverage standards that went into effect Jan. 1.

And if 14 million people were covered by non-group policies nationwide (as indicated by the National Health Information Survey of the U.S. Centers for Disease Control and Prevention), that percentage translates to 2.6 million non-group policies discontinued, the authors stated.

To be sure, there is always a statistical margin of error in any random-sample poll. Lead author Lisa Clemans-Cope told us in an email that statistically, there is a 95 percent certainty that the true percentage whose non-group policies were discontinued falls somewhere between 16.2 percent and 23.3 percent. That would put the number at anywhere between about 2.3 million and 3.3 million.

That range could be higher or lower depending on what number is used for the total who had non-group coverage in the first place. The Urban Institute authors cite a study published last year that found estimates of the total number of people covered by non-group policies ranged from 9.55 million to 25.3 million. So if 18.6 percent of non-group policyholders got notices that their policies were being dropped because of the new law, as the poll indicates, then the actual number whose plans were dropped could be as low as about 1.8 million or as high as 4.7 million (coincidentally, the same as the AP’s figure), depending on how many had such policies in the first place.

The authors, as noted, picked an estimate that fell in the middle of this range to arrive at their figure of 2.6 million discontinued policies. Until and unless better evidence comes along, that’s the most solidly based figure available.

How many “millions” so far have gained coverage?

The early numbers on enrollment in the exchanges and Medicaid don’t tell us how many of the enrollees were previously uninsured — despite some claims from Democrats to the contrary. The Obama administration disclosed on April 10 that 7.5 million had signed up for plans on the exchanges, but we don’t know how many previously had insurance. The Medicaid rolls increased by more than 3 million through the end of February, the administration also said, a figure that would reflect both those newly eligible under the law and previously eligible but now signing up.

But a survey funded by the Robert Wood Johnson Foundation and conducted by the Urban Institute indicates that many of those signing up for the exchanges and Medicaid may have been uninsured. It found that 5.4 million of the previously uninsured had gained coverage between September and the beginning of March. The exchanges launched Oct. 1.

An April 8 report by the nonprofit RAND Corp. put the figure of newly insured higher. Based on a nationwide poll, Rand estimated that there had been a net gain of 9.3 million insured “adults” as of mid-March, when the poll was being conducted. That includes marketplace and Medicaid enrollment, as well as an increase in employer-based enrollment.

Neither of those figures includes an estimated 3 million young adults who gained coverage in 2010 and 2011, likely because of the law’s provision allowing them to stay on their parents’ policies.

RAND also estimated that 700,000 who previously had individual market plans were now uninsured. The survey didn’t ascertain whether those newly uninsured were due to cancellations or voluntarily dropped coverage.

It will be some time before more concrete coverage numbers are available. The RAND numbers are extrapolated from a survey, and one with sizable margins of error. The estimate of 9.3 million newly insured has a margin of error of 3.5 million people, meaning researchers have a high degree of confidence that the true number would be between 5.8 million and 12.8 million. And the estimate of 700,000 uninsured who previously had individual market plans carries a margin of error of 900,000, putting the likely real number somewhere between zero and 1.6 million people.

Millions more are expected to gain insurance because of the law nationwide in the coming years. The nonpartisan Congressional Budget Office estimates that there will be 25 million fewer uninsured due to the ACA as early as 2016.

Losing Doctors?

The AFP ad also makes the claim that “millions of people can’t see their own doctors,” but there’s no evidence that all those who had individual market policies discontinued ended up not being able to keep their own doctors. Anecdotally, we know of some folks who were able to keep the same doctor on a new insurance policy. But those are only a few individual stories. One of our guiding principles here is the saying, “The plural of anecdote is not data.”

It is true that using a smaller network of providers is one way insurers can reduce premium costs, and there is evidence that insurers are indeed doing that for exchange plans. As Deborah Chollet, a senior fellow at Mathematica Policy Research, a nonpartisan research firm, told us in December: “The narrow-network plans offered by some issuers are intended to (a) maximize negotiating leverage with providers by narrowing their PPOs; and (b) thereby reduce premiums to attract consumers.”

Limited networks have existed for some time, as anyone with an HMO, PPO and the like can attest. There are no available statistics showing whether the plans on the new exchanges have more or less narrow networks than existed in the individual market previously. But, again, insurers certainly are limiting their networks to price their plans competitively.

Karen Pollitz, a senior fellow at the Kaiser Family Foundation, told us: “It’s definitely the case (based on conversations with insurers and with providers) that insurers have decided to limit networks in some instances in order to price their health plans more competitively.” She continued: “It’s also definitely the case that some providers have declined to participate in some of the new health insurance networks, holding out for higher fees from some insurers in return for a promise to participate exclusively in their networks. This is market competition at work — not entirely transparent, unfortunately, so it’s not yet clear what the impact will be on patients.”

– Lori Robertson and Brooks Jackson

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Disconnecting the Dots in Arkansas http://www.factcheck.org/2014/04/disconnecting-the-dots-in-arkansas/ Fri, 11 Apr 2014 21:41:03 +0000 http://www.factcheck.org/?p=83257 A TV ad says Rep. Tom Cotton was “paid handsomely working for insurance companies” before joining Congress and now wants to transform Medicare in ways that would benefit the industry at the expense of seniors. But there’s no evidence Cotton did work for insurers. His only established connection to the industry involved consulting work for a federal agency.

The Senate Majority PAC ad also makes an outdated claim when it says Cotton, who’s running for Senate in Arkansas, wants to “end Medicare’s guarantee,” costing seniors “$6,000 more a year.” That’s based on an old budget plan proposed by Rep. Paul Ryan in 2011 and supported by Cotton as a candidate that year. But that plan has been superseded by more current budget plans offered by Ryan — and supported by Cotton — and the $6,000 figure is no longer accurate.

Senate Majority PAC, a group dedicated to electing Democrats to the Senate, purports to “connect the dots” on Cotton’s career. It paints him as someone who is trying to help out his buddies in the insurance industry by supporting the Ryan budget. However, there is a disconnect between the claims and the facts.

‘Paid Handsomely’ for What?

The ad, “Connect the Dots,” was released on March 27 as part of the Democratic PAC’s push to counter advertising by Americans for Prosperity, a conservative group with ties to Charles and David Koch. Americans for Prosperity has already spent nearly $2 million on ads in the Arkansas Senate race attacking Democratic Sen. Mark Pryor.

The Cook Political Report rates the race a toss-up, making it an important battleground for both parties in the fight to control the Senate.

Here’s the text of the ad:

Narrator: Corporate special interests are spending millions to smear Mark Pryor and elect Tom Cotton. Why? Before Congress, Cotton got paid handsomely working for insurance companies and corporate interests. Now, Cotton wants to end Medicare’s guarantee, giving billions in profits to insurance companies while costing seniors [$]6,000 more a year. The real Tom Cotton: a politician we just can’t trust.

So, what exactly did Cotton do before running for Congress in 2012? After getting a law degree at Harvard University, Cotton clerked for a federal judge and spent some time practicing law. Then, he enlisted in the U.S. Army. After leaving the Army, he got a job at McKinsey & Co., a global management consultant firm, and worked there up to the time he launched his congressional campaign. So, were any of his clients insurance companies when he was there?

We checked the ad’s citations, but none of the articles or documents listed mentioned Cotton’s involvement with the insurance industry. When we emailed Senate Majority PAC spokesman Ty Matsdorf, he directed us to Rep. Cotton’s Facebook “about” page.

Matsdorf, March 31: In Congressman Cotton’s biography, seen here https://www.facebook.com/TomCottonAR/info, he clearly lists the insurance industry as one of the many companies he advised as a businessman.

In regards to his specific duties working for insurance companies, that is a question that should and must be directed and answered by Congressman Cotton’s campaign, not the least of which because he is required by law to list them on his financial disclosure form.

The pertinent section on Cotton’s Facebook page reads, “Following his active-duty service, Tom worked as a management consultant for McKinsey and Company. As a businessman, Tom has advised some of America’s most respected companies on business strategy, operations, finance, and marketing. His industry experience includes agribusiness, health care, oil and gas, food processing, insurance, and aerospace.”

So, Matsdorf is wrong when he says the Facebook post “clearly lists the insurance industry as one of the many companies he advised as a businessman.” It says “his industry experience includes … insurance.” What is that industry experience?

We took Matsdorf’s advice and looked at Cotton’s financial disclosure form and asked his campaign about his work prior to entering Congress. Cotton’s financial disclosure form for 2011, the year he left McKinsey to run for office, lists his salary from McKinsey as $84,999. Cotton also received honorariums totaling $4,000 from Harvard University and the Hudson Institute. However, this didn’t tell us anything about his clients, or what accounted for the insurance industry experience listed on his Facebook page.

Cotton campaign spokesman David Ray pointed us to a story in the Daily Caller that quoted Priam Dutta, a colleague of Cotton’s at McKinsey. Dutta told the Daily Caller that he was Cotton’s team leader on a project for the Federal Housing Administration, and that that had been Cotton’s only insurance industry experience. A spokesperson for McKinsey & Co. confirmed for us that Cotton did not do any work for insurance companies while at the firm.

Ray also provided us with a McKinsey Center for Government report called “Transforming government performance through lean management.” The report features a summary of the FHA project in which Cotton participated (see page 10). Cotton worked on behalf of the Office of Multifamily Housing Programs, a part of the FHA which “provides $80 billion worth of insurance to lenders who finance apartment buildings.” His McKinsey team helped the Office of Multifamily Housing Programs learn to better manage its backlog.

It is against McKinsey policy to provide details about the project, such as how much the agency was paid for its work, or the extent of Cotton’s involvement. However, the insinuation that Cotton’s time at McKinsey gave him ties to the insurance industry that are now influencing his views on Medicare is simply misplaced. Any money that McKinsey made from the FHA project would have ultimately come from the federal government, not from private insurance companies.

It’s worth noting that Pryor so far has received a bit more in direct campaign contributions from the insurance industry — $89,000 — than Cotton has — $66,905, according to the Center for Responsive Politics.

Digging up the Old Ryan Budget

The Senate Majority PAC ad also claims that Cotton “wants to end Medicare’s guarantee, giving billions in profits to insurance companies while costing seniors [$]6,000 more a year.” These claims are based on Cotton’s support in 2011 for Ryan’s “Path to Prosperity” budget plan, which included dramatic changes to the Medicare system. Cotton was only a candidate at the time. He won his congressional seat in the November 2012 election, so he never had a chance to vote on the plan this ad cites. More important, Ryan’s recent budget plans — also supported by Cotton — moderated the original Medicare proposal.

We have written a lot about Democrats’ claims that the 2011 Ryan budget “ends Medicare.” In fact, it was one of our “Whoppers of 2011.” It also showed up during the 2012 campaign, despite the fact that the Medicare plan in question had already been replaced. Every budget Ryan has created following his 2011 proposal has included a traditional Medicare option along with premium-support payments (like a subsidy) for seniors to buy private insurance plans. Ryan’s most recent budget isn’t much different in this respect. In fact, it may be more generous than any Medicare plan Ryan has put forth during his time as chairman of the House Budget Committee. Loren Adler, a health policy expert at the Committee for a Responsible Federal Budget, said in an email to Talking Points Memo:

Adler, April 3: Under the cap formulation in Ryan’s previous budgets beneficiaries would have been liable for increased premiums if Medicare per beneficiary costs rose faster than GDP+0.5% annually to make up the difference, which could have led to beneficiaries paying a higher percentage of Medicare program costs, on average, over time.

Ryan’s current budget plan eliminates this cap, and ties premium-support payments to insurers’ average bid for a region. The House Budget Committee’s new budget report says this change was made in light of a September 2013 CBO report on premium-support payment options for Medicare. The report found that when premium-support payments were tied to the average bid for a region, both the federal government and beneficiaries would see savings.

As for the $6,000 increase in costs for seniors, this was accurate of the 2011 Ryan budget, based on what a CBO analysis concluded 65-year-olds would pay 10 years from now. None of Ryan’s plans have advocated changing the Medicare system for those currently 65 and older. His most recent one is no different. The changes would only affect those turning 65 on or after Jan. 1, 2024. We will have to wait and see what the CBO has to say about Ryan’s latest Medicare proposal to know what, if any, cost increases would follow.

The bottom line is that the Senate Majority PAC used both false and outdated information in its attack on Cotton.

– Madeleine Stevens

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Obama’s Numbers (April 2014 Update) http://www.factcheck.org/2014/04/obamas-numbers-april-2014-update/ Fri, 11 Apr 2014 13:36:39 +0000 http://www.factcheck.org/?p=83617 Summary

Our latest update shows corporations and stockholders still prospering under Barack Obama’s presidency, while the economy steadily adds more jobs and millions sign up for health insurance under Obamacare.

But wages remain stagnant for those who have jobs, and there are still 3.7 million who have been jobless for six months or more.

U.S. oil production is booming and dependence on oil imports is plunging. But the national debt has now almost exactly doubled under this president, and historically large deficits continue.

ObamasNumbers-2014-Q1

 

Analysis

This report follows our January 2014 update and previous quarterly reports dating back to our first “Obama’s Numbers” article in October 2012. All figures here reflect the most recent available as of April 10.

Affordable Care Act

Now that the major provisions of “Obamacare” have gone into effect, and the official enrollment period for obtaining private health insurance through the new exchanges has ended, some more or less solid numbers are starting to come in.

According to outgoing Health and Human Services Secretary Kathleen Sebelius, 7.5 million people had signed up for privately issued policies through the exchanges by the April 1 deadline. And that number exceeded what the nonpartisan Congressional Budget Office had originally projected, despite all the early problems with the administration’s HealthCare.gov website.

In addition, the administration issued a report stating that 3 million other individuals had signed up for government-issued insurance either through Medicaid or the Children’s Health Insurance Program. That number is as of February, and so is expected to grow in coming months. There is no deadline for signing up for either Medicaid or CHIP.

Most if not all of the Medicaid/CHIP growth is due to the new law. Enrollment grew by 8.3 percent in states that had expanded Medicaid eligibility under the ACA to include people higher up the income scale. But even in states that have not expanded eligibility rules, the report found growth of 1.6 percent. Much of that is thought to be due to people who had been eligible for Medicaid or CHIP all along finally signing up to avoid paying the law’s penalty tax for going without coverage. Some call it the “woodwork effect” of the ACA — bringing eligible people “out of the woodwork” to sign up.

The exact total of people who have gained new coverage because of Obamacare isn’t known. An April 8 report by the RAND Corp., based on a nationwide poll, estimated that there had been a net gain of 9.3 million newly insured “adults” as of mid-March, when the poll was being conducted. But that number would of course fail to count the last-minute surge of signups that took place after the poll, and says nothing about children who gained coverage when their parents signed up. The number also goes beyond exchange and Medicaid enrollment, and includes a significant gain in employer-sponsored insurance.

The survey has a large margin of error, plus or minus 3.5 million for the net gain of newly insured. That means there’s a high degree of confidence that the real number is between 5.8 million and 12.8 million.

Jobs & Wages

The economy as of March had gained just under 4 million jobs since Obama took office. The unemployment rate stood at 6.7 percent, which was 1.1 points lower than when he took office and 3.3 points lower than it was at its worst point during October 2009. Total employment now stands just 437,000 jobs short of the peak number reached a year before Obama became president, just as the great recession of 2007-2009 was beginning.

The numbers remain grim for those without jobs, however. The number of those who have been out of work for at least 27 weeks — the so-called long-term unemployed — has declined recently to a bit over 3.7 million, but is still 1 million higher than when Obama took office. The average number of weeks that the unemployed have been without work has also declined recently to 36 weeks, but that’s still 15.8 weeks more than the average for the month he entered the White House.

Even for those who are working, wages have barely kept up with the modest rates of inflation that have marked Obama’s tenure. Real average weekly wages — measured in constant dollars adjusted for inflation — in March were just 0.2 percent above where they were in January 2009.

Stocks & Profits

 The picture has grown much brighter for corporations and their stockholders. Pre-tax corporate profits set yet another record in the last three months of 2013, the most recent quarter on record. They were running at a seasonally adjusted annual rate of $1.9 trillion, which is $1.2 trillion higher than in the recession-wracked final quarter of 2008, just before Obama took office.

That’s a gain of 184 percent during his presidency — and nearly half a trillion dollars (35 percent) higher than the record quarter (July – September quarter of 2006) before he took office.

Stockholders have been prospering also. Since the day Obama took office, the Standard & Poor’s 500-stock index has more than doubled, rising by 128 percent as of the close of markets on April 10. The Dow Jones Industrial Average has also doubled, rising by 103 percent. And the NASDAQ Composite index has nearly tripled, rising by 181 percent. 

Deficits & Debt

The president is fond of saying he’s cut the federal deficit in half. That’s true as far as it goes. But it’s also a fact that the federal debt has just about exactly doubled since he took office.

The deficit — the yearly difference between federal spending and revenue — was $1.4 trillion in fiscal year 2009, was down to $680 billion in the fiscal year that ended last Sept. 30, and is projected to be $514 billion when the current fiscal year ends several months from now, according to figures released Feb. 4 by the CBO. But that’s still high by historical standards — equal to 3 percent of the nation’s projected economic output. It’s nearly double the 1.6 percent average deficit between World War II and fiscal 2009.

As a result of all this deficit spending, the total debt that the federal government owes to the public has gone up 99.8 percent since the day Obama entered office, rising to $12.6 trillion.

The total debt — counting money the government owes to itself through the Social Security and other trust funds — has now reached $17.6 trillion, an increase of 65 percent. But it’s the debt owed to the public that economists consider more relevant.

The debt figures alarm budget experts. The CBO’s most recent budget outlook estimated the debt owed to the public would equal 74 percent of GDP by the end of the current fiscal year, and will rise to 79 percent in 2024 under current spending and tax laws. “Such large and growing federal debt could have serious negative consequences,” CBO stated. The continuing deficits and high interest payments could slow down economic growth and even increase the risk of another economic crisis, CBO said.

Food Stamps

The number of people in the Supplemental Nutrition Assistance Program (formerly known as food stamps) has been declining as the economy improves and Congress enacts spending cuts. It hit a record high of nearly 47.8 million people in December 2012 and has gone down by about 1.3 million since then. Nevertheless, the total for January stood at 46.5 million, which is an increase of 45.5 percent compared with the month Obama became president.

Gasoline, Oil & Mileage

Gasoline prices have remained in check for the recent portion of Obama’s tenure as president. The national average price for regular gasoline at the pump has fluctuated since the start of 2011 between $3.07 and $3.97 per gallon, according to the U.S. Energy Information Administration.  It was $3.60 during the week ending April 7.

And while that most recent price is 95 percent higher than what it was when he took office — when it was unusually depressed as a result of the worst recession since the Great Depression of the 1930s — it is well below the record of $4.11 set in July 2008.

One reason prices haven’t gone higher is the continuing boom in U.S. oil production, which is up 62 percent during Obama’s tenure, comparing the EIA’s figures for the first three months of 2014 with the final full quarter of 2008, just before Obama entered the White House. Mirroring that figure, U.S. imports of oil from abroad have gone down 52 percent during the same period.

The year before Obama took office, EIA figures show the U.S. imported 57 percent of the oil it consumed. During the first two months of this year, that figure was down to 28.5 percent and dropping fast.

A related factor is improving automobile fuel efficiency. As of March, the average “sticker” mileage of new cars and light trucks sold in the U.S. was 25.4 miles per gallon, an increase of 21 percent since January 2009, according to the University of Michigan’s Transportation Research Institute.

Wind & Solar

Wind and solar power have more than tripled during Obama’s presidency. Since he first took office, the amount of electricity produced from these two renewable sources has increased by 221 percent, comparing the most recent 12-month average from the EIA with the totals for 2008. The amount produced by wind turbines is nearly 20 times larger than the amount produced by solar methods, but solar power is increasing more rapidly, having grown more than ten-fold since 2008.

Still, wind and solar taken together account for only 4.4 percent of all U.S. electrical generation, up from 1.4 percent in 2008.

Exports

In his 2010 State of the Union address the president vowed to double U.S. exports by the end of 2014. But that’s not happening.

As the most recent figures available from the U.S. Commerce Department show, seasonally adjusted exports of goods and services have increased just 36 percent, comparing the last three months of 2008 with the last quarter of 2013.

Home Ownership & Housing Starts

Thanks partly to a wave of foreclosures that followed the collapse of the housing bubble, fewer Americans now own their homes than did when Obama took office. The home ownership rate, which had already begun to decline during the Bush administration, fell to a seasonally adjusted 65.1 percent in the last three months of 2013, according to Census Bureau figures. That’s 2.4 percentage points lower than it was in the quarter before the Obama presidency began, and 4.3 percentage points below the high-water mark of home ownership set in the second quarter of 2004, when 69.4 percent of Americans lived in their own homes.

To be sure, housing starts are up. The number of new privately owned housing units begun in February, the most recent period for which the Census Bureau has reported, was 85 percent higher than it was in the recession month of January 2009, measured as a seasonally adjusted annual rate. But that hardly represents a housing boom. The rate is still less than 40 percent of what it was during January 2006, the best month of the Bush administration.

Guantanamo Prisoners

Nothing has changed since our last report at the detention facility at the Guantanamo Naval Base in Cuba. There are still 155 prisoners, which the Pentagon prefers to call “detainees.” That’s a reduction of just 36 percent from the 242 who were being held when Obama took office — despite an order Obama signed two days into his presidency directing that the detention facility be closed within one year.

And the war in Afghanistan grinds on. According to official Pentagon figures, the U.S. has suffered a total of 1,686 military fatalities since 2008 in Operation Enduring Freedom.

– by Brooks Jackson

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