FactCheck.org » Americans for Prosperity http://www.factcheck.org A Project of the Annenberg Public Policy Center Thu, 11 Sep 2014 14:40:19 +0000 en-US hourly 1 http://wordpress.org/?v=3.8.1 Stretching the Truth in Arkansas http://www.factcheck.org/2014/07/stretching-the-truth-in-arkansas/ Mon, 21 Jul 2014 21:28:25 +0000 http://www.factcheck.org/?p=86831 The conservative group Americans for Prosperity stretches the truth to attack Sen. Mark Pryor of Arkansas for “higher gas and grocery bills.”

  • AFP blames Pryor’s vote to ban drilling in Alaska’s Arctic National Wildlife Refuge (ANWR) for higher gas prices. But the Energy Information Administration says drilling in ANWR would translate to little, if any, drop in prices at the pump.
  • As for higher grocery bills, AFP cites Pryor’s vote to increase ethanol production, which raised the demand for corn and the price of livestock. But the Department of Agriculture says the impact on overall retail food prices was less than 1 percent.

The Arkansas race is one of nine competitive races considered critical to whether Republicans can regain control of the Senate. Already, there has been more than $7.5 million in outside money spent on the race, according to the Center for Responsive Politics.

The ad from Americans for Prosperity claims Pryor has “made things harder” for the state’s unemployed and working families “living paycheck to paycheck.” It shows images of downcast men and women, who could be “your neighbor, your friend, your daughter.”

AFP TV Ad: You know who they are. Your neighbor, your friend, your daughter. Maybe it’s you. 84,000 Arkansans out of work. Families living paycheck to paycheck. And Mark Pryor has made things harder. Voting with Barack Obama 90 percent of the time. Higher gas and grocery bills. Higher healthcare costs from Obamacare. Driving up the debt we owe China. Tell Mark Pryor Arkansas families need jobs, not bigger government.

It’s true, as the ad claims, that were 84,000 Arkansans out of work in May, according to the Bureau of Labor Statistics. But that’s the fewest number since November 2008.

As for the claim that Pryor has voted with President Obama 90 percent of the time, that was true last year, according to a vote analysis by CQ Weekly. But as we noted once before, Pryor also voted against Obama more than any other Senate Democrat last year.

More importantly, AFP provides weak evidence to support its claims that Pryor is responsible for such things as “higher gas and grocery bills” and “higher healthcare costs from Obamacare.”

Gas Prices

AFP cites three votes Pryor cast against domestic drilling to support its assertion that Pryor is responsible for higher gas prices. The three votes were for amendments which would have banned drilling in Alaska’s Arctic National Wildlife Refuge (ANWR).

ANWR covers over 19 million acres of land and water in northeastern Alaska. In 1980, the Alaska National Interest Lands Conservation Act (ANILCA) designated most of the area as protected wilderness, except for a section of about 1.5 million acres. This area along the coast — since referred to as the “1002 Area” after the section of the bill that defined it — is subjected to studies that relay to Congress the potential impacts of oil and gas exploration and development. ANILCA placed the area in limbo, and whether or not to authorize drilling in ANWR has been a political issue for nearly 40 years.

A 2008 report by the Energy Information Administration examined the impact of drilling in ANWR and concluded that oil production in that area would not significantly influence world oil prices. The projected potential price reduction would be around 41 cents to $1.44 per barrel of low-sulfur, light (LSL) crude oil in 2026/2027. The price of oil is currently a little over $100 per barrel. According to EIA, U.S. refineries produce about 19 gallons of motor gasoline from one barrel of crude oil. So, that translates to pennies per gallon at the gas pump. But since oil is a global commodity, EIA warned that there may not be any impact at all.

EIA, 2008: Assuming that world oil markets continue to work as they do today, the Organization of Petroleum Exporting Countries (OPEC) could neutralize any potential price impact of ANWR oil production by reducing its oil exports by an equal amount.

For some context, the average price of regular conventional gasoline was $2.34 per gallon when Pryor cast the last of the three votes cited by AFP, and it was $3.56 on July 14, according to EIA data. The price of gasoline fluctuated a good deal between those dates, and was $1.83 per gallon when Obama took office in January of 2009. In 2011, we looked into some of the claims about whether Obama was to blame for higher gasoline prices and found that much of the rhetoric was misplaced.

Finally, the claims about higher gas and grocery bills come immediately after the ad blames Pryor for “voting with Barack Obama 90 percent of the time.” That may leave the false impression that Pryor voted with Obama to raise prices, but, in fact, the ANWR votes cited by AFP were cast in 2003 and 2005, long before Obama became president — although then-Sen. Obama voted in favor of the two bills in 2005.

Grocery Bills

How was Mark Pryor responsible for “higher grocery bills”? Because he voted for the Energy Independence and Security Act of 2007, according to AFP. This, too, is a stretch.

In 2005, a section of the Energy Policy Act created the Renewable Fuel Standard program. That program mandates that a specified level of renewable fuel be blended into gasoline. In 2007, the program was expanded, increasing the required volume of renewable fuel. The rapid increase in demand for ethanol, which increased prices of livestock and corn products.

However, increased renewable fuel mandates were not the only cause of rising food prices. Other factors, such as “low global stocks, droughts, exchange rates, policy responses by some major trading countries, and rising incomes in some countries such as India and China, have also contributed to price increases,” according to the USDA.

In fact, the USDA said, in 2008, that the inflated price of corn had very little affect on overall retail food prices. According to the USDA’s Economic Research Service, “higher corn prices increase animal feed and ingredient costs for farmers and food manufacturers, but pass through to retail prices at a rate less than 10 percent of the corn price change.” Because food using corn as an ingredient makes up less than one-third of retail food spending, the report states, “overall retail food prices would rise less than 1 percentage point per year above the normal rate of food price inflation when corn prices increase by 50 percent.”

In April 2009, the nonpartisan Congressional Budget Office estimated that about 10-15 percent of the rise in food prices in 2008 could be attributed to ethanol subsidies. Food prices that year rose 5.1 percent, so the effect of ethanol subsidies was responsible for less than a 1 percent increase in the price of food that year.

CBO, April 2009: CBO estimates that from April 2007 to April 2008, the rise in the price of corn resulting from expanded production of ethanol contributed between 0.5 and 0.8 percentage points of the 5.1 percent increase in food prices measured by the consumer price index (CPI). Over the same period, certain other factors — for example, higher energy costs — had a greater effect on food prices than did the use of ethanol as a motor fuel.

The retail cost of food has, historically, risen about 2.5 percent to 3 percent a year, said Ephraim Leibtag of the USDA’s Economic Research Service. Factors such as weather, production issues and changing consumer demand, all effect the overall price of food, he said. And a spike in the price of any single commodity, such as corn, generally translates to only a small overall increase in retail food prices.

It is worth noting that the Energy Independence and Security Act passed the Senate with bipartisan support, 86-8. (Seven Republicans and one Democrat opposed it; and then-Sens. Obama, Hillary Clinton, Joe Biden, as well as John McCain, did not vote). And it was signed by then-President George W. Bush, not Obama, although the ad implies otherwise.

Food prices are up under Obama, but not as much as they were before he took office. The index measuring the average consumer price of all food and beverages (including restaurant meals) was 10.7 percent higher in May than it was when Obama took office five and a half years earlier, according to figures from the Bureau of Labor Statistics. For some perspective, food prices rose by 21.9 percent in the five and a half years prior to Obama taking office.

Health Care Costs From Obamacare

The ad also claims Pryor’s vote for the Affordable Care Act, aka Obamacare, is responsible for higher health care costs. AFP cites a Forbes story reporting on an analysis from the conservative Manhattan Institute that concluded that individual market premiums would rise by an average of 49 percent due to the new health care law.

But the ad does not mention that it is referring only to those who buy insurance on their own as opposed to through an employer. Just over 120,000 Arkansans, or 4 percent of the state’s population, purchased insurance on the individual market in 2012, according to the nonpartisan Kaiser Family Foundation.

A couple other big qualifiers (which we have noted previously when the Manhattan Institute report has been cited in attack ads): The institute didn’t adjust for the fact that the ACA requires certain minimum benefits, which many pre-ACA individual market plans didn’t meet. By and large, the post-ACA plans are more robust (whether purchasers like or want that or not). So it is not comparing similar types of plans before and after the ACA. And the institute’s figures don’t account for federal subsidies, which the Congressional Budget Office estimated would be extended to 80 percent of all those buying exchange plans nationwide.

As we have said repeatedly, premiums in the individual market can go up or down, perhaps significantly, depending on the individual.

And most Arkansans — 40 percent of the population — have insurance through their workplaces. Nationwide, 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.

When we have explored this issue in the past, we noted that experts attributed a small increase in work-based premiums directly to the ACA. When family premiums jumped 9 percent from 2010 to 2011, for example, experts told us that the law was responsible for a 1 percent to 3 percent increase, with the remainder due to higher medical costs. That was expected, as the law 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 an increase in caps on annual coverage. Since that initial jump, however, the yearly employer-based premiums have risen at historically low rates.

Another 38 percent of Arkansans have government-sponsored health insurance, primarily Medicare or Medicaid, which would not be affected by the changes in the individual market.

– Eden Everwine and Robert Farley

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AFP Misuses Survey, Again http://www.factcheck.org/2014/05/afp-misuses-survey-again/ Fri, 30 May 2014 18:52:36 +0000 http://www.factcheck.org/?p=85025 Americans for Prosperity is again citing an unscientific survey on health premiums to attack Democratic supporters of Obamacare – this time claiming in a new TV ad that premiums are up “by nearly 40 percent” in Michigan.

But the ad – which targets Democratic Rep. Gary Peters in the Michigan Senate race – ignores some important caveats about the 40 percent figure:

  • The ad leaves the false impression that the rate hike applies to all health premiums, but the figure refers only to the no more than 5 percent of Michiganders who get insurance on the individual market.
  • The 40 percent figure is based on a survey of six insurance brokers in the state, and according to a survey expert has no statistical validity.
  • The figure, even if it were accurate, doesn’t account for improved coverage or government subsidies, which 80 percent of those in the new individual market exchanges are expected to receive.

The AFP ads began airing statewide in Michigan on May 28 and will run for several weeks. Peters, a three-term congressman, is locked in a see-saw battle with Republican and former Michigan Secretary of State Terri Lynn Land to succeed Sen. Carl Levin, who is retiring. Americans for Prosperity, which was founded by billionaire businessman and conservative/libertarian political activist David Koch, has actively opposed Peters for his support of the Affordable Care Act, though its ads have not always been accurate about the effects of the law.

The ad’s narrator talks about rising costs for Michigan families and alleges that Peters is “making things worse, voting for Obamacare, driving up our health premiums by nearly 40 percent.”

The ad suggests health insurance premiums are going up nearly 40 percent for everyone in Michigan, and that’s simply not the case. Employer-sponsored plans, where most Americans (and Michiganders) get their coverage, have seen premiums growing at historically low rates in the past few years.

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. The 2014 figures have not yet been published. Since the ACA was passed in 2010, employer-sponsored 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.

Health experts attributed to the ACA a 1 percent to 3 percent increase in employer-based premiums between 2010 and 2011 — when the law was first put into place — due to its required 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. But Kaiser Family Foundation CEO Drew Altman attributed at least some of the 2013 slowdown to the ACA as well.

That’s the picture for the employer-based plans held by most people in the state, but it turns out the AFP ad’s claim only relates to the no more than 5 percent of Michiganders in the individual market. Small print in the ad cites an April 7 story in Forbes, which is about a survey of 148 insurance brokers by Morgan Stanley, to help guide investor decisions about stock purchases. A state-by-state chart suggests a 35.6 percent increase in rates in the individual market in Michigan in 2014, according to responses from six insurance brokers in the state.

We’ve cautioned our readers before not to put too much stock in this Morgan Stanley survey.

Previously, it had been cited by AFP and others as the basis for a claim that rates have gone up 90 percent in New Hampshire — based on the response of one insurance broker in that state. Robert Santos, senior methodologist at the Urban Institute and past president of the executive council at the American Association for Public Opinion Research, told us then that the survey has no scientific validity with regard to the aggregated nationwide results. And that’s particularly true of the state results, which are based on so few responses, he said.

“Anyone would be on very tenuous ground in trying to make a state-specific inference,” Santos said. (A small notation below the state chart uses technical jargon to warn the same thing.)

Nonetheless, that’s exactly what AFP has done in Michigan.

It is quite possible, even probable, that rates have gone up in the individual market in Michigan. The Affordable Care Act requires plans to offer a minimum set of benefits, and that increases the cost of some plans. Those changes also make it extremely difficult, if not impossible, to compare individual market rates in 2014 to those in previous years for comparable policies.

We reached out to Michigan’s Department of Insurance and Financial Services for premium information on the individual market to see how the Morgan Stanley figures stand up. Caleb Buhs, a spokesman for DIFS told us that while the state did compile rate information for 2014 in the individual market, there is no comparable data from previous years.

“It would be difficult to compare 2014 rates to previous years anyway due to the changes required by the ACA; it wouldn’t be an apples-to-apples comparison,” Buhs wrote to us in an email.

DIFS is headed by Director Ann Flood, who was appointed in November 2013 by Republican Gov. Rick Snyder.

As we have said before, those in the individual market faced the biggest changes under the law. Premiums in that market could go up or down, perhaps significantly, depending on the individual. 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.”

In 2009, the nonpartisan Congressional Budget Office said that the average premium per person in the individual market would be about 10 percent to 13 percent higher in 2016 because of the health care law compared with what the average would have been in that same year without the law’s passage. But it added that for most, subsidies would push their costs “well below” what they would have been charged in the absence of the law. In its latest report, the CBO says about 80 percent of an estimated 25 million joining the exchanges by 2024 will receive subsidies.

Last month, CBO reported that its 2009 estimate of premium increases in the individual market was too high. CBO expected plans in the new exchanges would closely resemble employer-based plans, but it has found, in general, “lower payment rates for providers, narrower networks of providers, and tighter management of their subscribers’ use of health care than employment-based plans do.” In other words, the plans so far aren’t quite as advantageous as employer plans.

CBO estimated the average cost of individual policies for the second-lowest-cost “silver” plan in the exchanges is about $3,800 in 2014. That’s expected to rise slightly to $3,900 in 2015, and then increase by about 6 percent a year until 2024.

All of that CBO data is looking at 2014 — when the exchanges were created — forward to 2024, not from 2013 to 2014 (which the ad highlights). Again, there likely was some increase in individual market rates this year due to new minimum requirements for individual market plans. So some are paying more to get better insurance, whether they wanted it or not. But for many, those increased costs were offset by government subsidies. And some individuals who previously faced higher rates because of medical conditions will pay less under the ACA, which requires that insurers not price individual market plans based on health status.

None of that is considered in the Morgan Stanley survey. And perhaps most important, it would be unwise to put much stock in a survey of six insurance brokers in Michigan to arrive at a solid number on premium increases in 2014.

– Robert Farley

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‘Outright Lies’ in Alaska? http://www.factcheck.org/2014/05/outright-lies-in-alaska/ Fri, 02 May 2014 14:42:35 +0000 http://www.factcheck.org/?p=84260 In the Alaska Senate race, the special interest battle is on: A radio ad from GOP frontrunner Dan Sullivan complains of “outright lies” in a TV ad from a super PAC supporting Democratic Sen. Mark Begich. The pro-Begich ad, meanwhile, complains about the billionaire Koch brothers supporting Sullivan’s campaign. We didn’t find “outright” falsehoods, but both ads are misleading.

Sullivan says that Begich “was unconcerned” about the closing of an oil refinery near Fairbanks and the loss of 80 jobs there. The ad claims Begich said, “It’s the private sector making a decision.” But that was only part of Begich’s response. He went on to say: “We have to do everything we can to be sure those who have jobs, those families, have opportunities.”

Meanwhile, the super PAC, Put Alaska First, claims in its TV ad that Sullivan “remained silent about jobs being lost” at the refinery, which is owned by Koch Industries. Not exactly. Sullivan’s campaign “remained silent” not on the lost jobs, but on an anti-Koch brothers campaign by the Democratic Senatorial Campaign Committee that highlighted the fact that Koch Industries is closing the Alaska refinery while Americans for Prosperity, an advocacy group created by David Koch, is spending hundreds of thousands attacking Begich.

Both sides are stretching the facts in an attempt to make the other look uncaring on the loss of Alaskan jobs and beholden to outside special interest groups.

Koch Ads and Refinery

In this toss-up Senate race, Begich has been weathering a storm of attack ads from Americans for Prosperity, to which David and Charles Koch, co-owners of Koch Industries, have been major contributors. Begich has fought back with ads saying these “billionaire outsiders” should “go home” and highlighting the fact that Koch Industries is closing the Flint Hills Resources oil refinery.

In late April, the pro-Begich super PAC released another ad featuring the Flint Hills closing, but this time going after Sullivan, the former Alaska attorney general whose poll numbers put him neck-and-neck with Begich. The ad says Sullivan “remained silent” on the loss of jobs at the refinery, and it says the Koch brothers are “supporting his campaign.”

The ad features an Alaska resident saying to camera: “When the North Pole refinery closes, 80 jobs are gone. Those jobs mean everything for a lot of folks around here. But for those lower 48 billionaires that are shutting it down, those jobs are just numbers on a spreadsheet.”

Koch Industries owns Flint Hills Resources, which announced in February that it was closing its North Pole refinery and laying off 81 employees by Nov. 1. Pollution of the local water supply, which was an issue before Koch acquired the refinery in 2004, was one reason the refinery said it was ending its operations. Jeff Cook, Flint Hills’ regional director of external affairs, told Anchorage’s KTUU-TV that the groundwater cleanup costs were “in the tens of millions of dollars, and along with the economic challenges of refining in Alaska, [it’s] caused us to make this decision.”

The Alaska Dispatch reported that weeks before the closing announcement the refinery had asked the state Department of Environmental Conservation to allow much higher concentrations of the chemical sulfolane in groundwater than the state had considered acceptable. The Dispatch wrote: “The company has tangled with the state Department of Environmental Conservation over what the appropriate level of cleanup is for the site and on property near the refinery. It is also battling the former owner of the refinery in court over liability for the spill.” While it will no longer refine oil, the facility will be an oil shipping and storage terminal.

The loss of 80 jobs at a refinery owned by Koch Industries — and the fact that the Koch-backed Americans for Prosperity is spending heavily in the race — has made the closing a focal point of this campaign.

The Put Alaska First ad goes on to say that Sullivan “remained silent about jobs being lost here,” while on screen viewers see: “Sullivan’s campaign has declined comment.” The citation is for a March 6 post by Alaska political blogger Amanda Coyne, who wrote about the DSCC’s campaign, called “GOP addicted to Koch,” which highlights the refinery closing and Americans for Prosperity’s spending on ads attacking Begich. Coyne wrote: “The DSCC is pressing the Senate GOP challengers for a response. Dan Sullivan’s campaign has declined comment.”

So, his camp declined to comment on Democratic criticism of the Koch brothers’ actions in Alaska and advertising in the Senate race.

Sullivan’s camp counters in its radio ad that Sullivan “worked hard to keep the Flint Hills refinery open while he was our [Department of Natural Resources] commissioner.” That’s a reference to a DNR-negotiated contract extension in 2013 for the state to sell barrels of royalty oil to the refinery. Kevin Banks, director of DNR’s Division of Oil and Gas, told Fairbanks’ Daily News Miner that the state wanted to sell the oil at a competitive and reasonable rate. “We were interested in negotiating a contract that would ideally keep these guys in business,” Banks said. But a year later, the refinery is closing.

The super PAC’s ad then ties Sullivan to the heavy anti-Begich spending by Americans for Prosperity, saying, “And those same billionaires, the Koch brothers, are supporting his campaign.” On screen, the ad says: “Close to $1 million on ads.” The citation is for a March 19 Alaska Public Radio story that said Americans for Prosperity had “already spent close to $1 million on ads against Mark Begich.”

The AFP ads haven’t mentioned Sullivan, nor has the group or the Koch brothers given directly to Sullivan. Some voters may get the impression from the ad that Sullivan had spent close to $1 million on ads thanks to Koch money. And Sullivan counters in his radio ad that he “has never taken a dime from the Koch brothers.” True, but it’s certainly reasonable to say that ads attacking the incumbent are, by extension, ads supporting the leading challenger. Whether Sullivan wanted AFP’s help or not, he’s getting it.

Sullivan’s Radio Response

Sullivan responded to the Put Alaska First attack with a radio ad in late April that begins: “Mark Begich’s liberal allies have no shame, telling outright lies about former Attorney General Dan Sullivan.” The PAC’s ad was misleading, mainly on its characterization of Sullivan’s response to the refinery closing. But “outright lies”? It doesn’t rise to the level of an outright falsehood, let alone a “lie,” which would mean there was intent to deceive, something we don’t know.

Sullivan’s ad goes on to offer its own misleading take on Begich’s response to the loss of jobs at the refinery. It says: “It was Begich who was unconcerned about the closing of the Flint Hills Refinery, saying quote, ‘It’s the private sector making a decision.’ ” Begich did say this, but he followed it up with, “We have to do everything we can to be sure those who have jobs, those families, have opportunities.”

The news story that includes that quote, from KTUU-TV, also paraphrased Begich as saying “that the closure could cause a trickle-down effect that will impact businesses like shipping, as a local source of jet fuel disappears, and the Alaska Railroad, which moves product from Flint Hills south, as many as 30 cars a day, five days a week.”

Voters can make up their own minds as to which candidate cares more — or less — about the refinery jobs. But the very article the Sullivan campaign cites shows that Begich wasn’t “unconcerned.”

Sullivan’s ad accurately says that he “has never taken a dime from the Koch brothers” and that Begich “has taken campaign cash from the Kochs.” The pro-Begich ad didn’t claim that Sullivan took money from the Kochs, only that the brothers are “supporting his campaign.” Voters should know the Koch Industries money to Begich was a $5,000 donation in 2010 to his leadership PAC. That’s 0.5 percent of the total amount the Great Land PAC has raised since the 2010 cycle (a total of $989,000). The PAC gives money to other Democratic congressional candidates and funds non-campaign expenses.

The ad goes on to say that “Begich’s false attacks on Sullivan are funded by liberal special interests in Washington, D.C., not Alaskans.” That’s a point Sullivan’s spokesman, Mike Anderson, also made to us via email: “[W]hat is at the height of hypocrisy is the fact that Put Alaska First is attacking the influx of outside spending when the PAC is almost entirely funded by liberal billionaires who are not from Alaska,” he said.

Indeed, Put Alaska First, headed by local lobbyist Jim Lottsfeldt, has received 82 percent (or $645,000) of its contributions from Senate Majority PAC, a group partly run by former aides to Senate Majority Leader Harry Reid.

But outside-of-Alaska money is the norm in this race, and both candidates are relying on those dollars heavily. According to the Center for Responsive Politics, 75 percent of Begich’s contributions and 89 percent of Sullivan’s are from out-of-state sources. This is perhaps not surprising: As the Center for Responsive Politics notes, Senate candidates from “the most sparsely populated states may get nearly all their money from out of state,” and Alaska ranks 47th among the states in terms of population.

Still, each candidate attempts to challenge the Alaska credentials of the other in these ads. Put Alaska First says, “Maybe if Sullivan was actually from Alaska, he’d care more about our jobs than his own,” while Sullivan’s radio ad counters, “Begich lives in a million-dollar house in Washington, D.C., not Alaska.”

Sullivan isn’t from Alaska – he’s from Ohio – but made Alaska his home from 1997 to 2002, then worked in Washington under then-National Security Adviser and later Secretary of State Condoleezza Rice, and came back to Alaska in 2009. As the Anchorage Daily News explains, his “Alaska authenticity” has been questioned by both Begich and GOP candidate Lt. Gov. Mead Treadwell. Begich — who, of course, now works in Washington as a senator — is a former mayor of Anchorage and was born and raised in that city.

– Lori Robertson, with Rachel Finkel

 

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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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Guilt By Association in Louisiana http://www.factcheck.org/2014/04/guilt-by-association-in-louisiana/ Thu, 10 Apr 2014 16:02:57 +0000 http://www.factcheck.org/?p=83550 In a classic case of misdirection, the Senate Majority PAC claims the “out-of-state billionaire Koch brothers” are spending millions to elect Republican Bill Cassidy so that he will “fight for them” on issues such as their “fight to let flood insurance premiums soar.” The problem: Cassidy championed the flood insurance legislation the Koch brothers opposed.

The ad also makes a wholly indefensible claim that the Koch brothers — through the conservative advocacy group Americans for Prosperity — “cut off hurricane relief for Louisiana families.” AFP opposed a Sandy relief bill — because it said the bill was laden with pork and should be offset with other budget cuts. AFP maintains that it did not oppose funding for legitimate Sandy relief. But more importantly, that had nothing to do with aid to “Louisiana families.” Other evidence cited by the Senate Majority PAC for this claim is even thinner.

The Senate Majority PAC, a Democratic super PAC, has gone on the offensive against the Koch brothers in an attempt to educate voters about the agenda behind Americans for Prosperity, which has invested heavily in attacking Louisiana Sen. Mary Landrieu and other Democratic candidates in the midterm elections.

Announcer: We’ve been battered by hurricanes, lost everything to floods. And for thousands of Louisianans, flood insurance and hurricane relief were our only protection. But the out-of-state billionaire Koch brothers funded the fight to let flood insurance premiums soar, helping the insurance companies. And cut off hurricane relief for Louisiana families. Now they’re spending millions to buy a Senate seat for Bill Cassidy, so he can fight for them. If the Kochs and Cassidy win, Louisiana loses.

Let’s start with the claim that the “Koch brothers funded the fight to let flood insurance premiums soar, helping the insurance companies.” This relates to the National Flood Insurance Program, which is billions of dollars in the red. In 2012, the House passed legislation that sought to phase in premium hikes to bring them in line with the actual cost of risk — so that taxpayers aren’t left picking up the difference. The bill, however, threatened to result in “stratospheric” flood insurance rate hikes for many homeowners in flood-prone areas such as in Louisiana.

Late last year, legislation was proposed to soften the blow of rate hikes by reinstating grandfathered rates and capping premium increases. AFP and a coalition of other conservative groups opposed the legislation, arguing that it is not “reasonable to leave taxpayers on the hook for insuring private property.”

But here’s the rub: Cassidy — the target of the Senate Majority PAC ad — led the charge for the legislation, which ultimately passed and was signed into law by President Obama. In a letter to New Orleans’ Times-Picayune, Republican Rep. Michael Grimm, who introduced the bill, thanked Cassidy for his efforts in shepherding it to fruition.

Grimm, March 22: The process to bring this critical legislation across the finish line was by no means easy and would not have been possible without the hard work and leadership of Rep. Bill Cassidy of Baton Rouge.

… I am extremely grateful to Dr. Cassidy for being such a dedicated partner in our efforts to protect homeowners throughout the country. Without his contributions, the House’s ability to forestall the catastrophic effects of Biggert-Waters and pass a far-reaching relief bill for the hard-working folks from the Big Apple to the Big Easy may never have been realized at all.

Cassidy, himself, put out a press release with a timeline highlighting his involvement in the legislation at every stage. In other words, here’s the logic: A is funded by B. B supports position C. Therefore, A supports C. Except, in this case, A does not support C. In fact, A worked against C. As Glenn Kessler, our fact-checking colleague at the Washington Post, put it: “If anything, Cassidy could run an ad saying that he took on the Kochs — even though they are backing him — and beat them.”

‘Cut Off Hurricane Relief for Louisiana Families’?

This is the second Senate Majority PAC ad that targets Cassidy by going after the Koch brothers. The first ad makes a similar, but more generic claim that the Koch brothers/AFP “even tried to kill relief for hurricane victims.” It’s true that AFP urged senators to vote against the Hurricane Sandy disaster-aid supplemental, H.R. 152, “unless the legislation is fully offset with other spending reductions.” AFP President Tim Phillips said it was also concerned that “Washington politicians are using this tragedy to secure billions in spending for their own pet projects like fisheries in Alaska, new cars for Homeland Security or tree planting on private property.”

Americans for Prosperity wasn’t the only group unhappy with the bill. Taxpayers for Common Sense, a nonpartisan group that tracks government earmarks, raised concerns about extraneous and non-emergency spending in the bill, and argued that at least the non-emergency spending should have been offset.

“I don’t think supporting offsets and calling for stripping non-emergency funding is the same thing as trying ‘to kill relief for hurricane victims,’ ” Steve Ellis of Taxpayers for Common Sense told us via email. “Especially since a lot of that bill wasn’t about relief at all.”

AFP spokesman Chris Neefus assured us via email that AFP did not oppose the underlying hurricane relief. He noted that AFP supported South Carolina Rep. Mick Mulvaney’s amendment to offset $17 billion in Sandy disaster relief by cutting 1.63 percent from every federal agency, including the military — though the amendment failed 162-258. AFP also supported an amendment from Sen. Mike Lee to offset the full cost of Sandy relief through across-the-board cuts from defense and domestic appropriations. That amendment failed 35-62.

Nonetheless, a comment from AFP’s New Jersey director at the time gave us pause. Steve Lonegan, then Americans for Prosperity’s New Jersey state director — who went on to run unsuccessfully for the U.S. Senate in New Jersey in 2013 — made a comment to reporters in December 2012 that suggested opposition to any kind of federal disaster aid.

“Tragic things happen every day to people – worse things than having your house flood – and we don’t hand them a check,” Lonegan said. “Having your shore house flood doesn’t rank … This is not a federal government responsibility. We need to suck it up and be responsible for taking care of ourselves.”

AFP’s Neefus told us Lonegan is no longer with AFP and that he was expressing his personal opinion, not that of AFP.

“Let me be unequivocal that AFP believes disaster relief funds are a reasonable function of government,” Neefus said. “We have weighed in on the side of responsible disaster budgeting, not eliminating disaster relief.”

More important, the latest ad makes the claim that the Koch brothers “cut off hurricane relief for Louisiana families.” The Sandy relief bill — which was cited atop back-up material the Senate Majority PAC sent us for the claim — has nothing to do with Louisiana residents. The other articles cited by Senate Majority PAC to back up the claim are even more tenuous. For one, the Senate Majority PAC cites AFP’s efforts in 2006 to strip $14 billion in pork spending from a Senate emergency bill to, in part, pay for repairs related to Hurricane Katrina. But it’s one thing to oppose pork attached to a spending bill, and quite another to oppose the underlying hurricane relief. There’s simply nothing to this claim.

More generally, the Senate Majority PAC points to AFP’s opposition to the 2012 Budget Disasters Act on the grounds that Congress ought to offset disaster relief spending with cuts from elsewhere in the federal budget. In addition, they note that AFP supported Rep. Paul Ryan’s 2013 budget plan, which called for nearly $5.3 trillion less in spending over 10 years than did Obama’s budget. Some liberal groups warned that could lead to cuts in disaster aid, but as we have noted in the past, the Ryan budget plan didn’t include enough detail to justify that kind of specific speculation.

In short, there is not enough there to justify a claim that the Koch brothers, “cut off hurricane relief for Louisiana families.” Nor is there any shred of evidence to speculate that Cassidy would support such efforts if elected to the Senate.

– Robert Farley

 

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Reid Wrong on AFP Criticism http://www.factcheck.org/2014/03/reid-wrong-on-afp-criticism/ Tue, 04 Mar 2014 23:22:18 +0000 http://www.factcheck.org/?p=82348 Senate Majority Leader Harry Reid wrongly blamed the conservative group Americans for Prosperity for promoting a “false” story of a woman whose insurance premiums went up $700 per month. AFP didn’t feature that woman’s story in any of its ads.

In a floor speech on Feb. 26, Reid lambasted brothers David and Charles Koch, owners of the oil and manufacturing company Koch Industries and major funders of the conservative Americans for Prosperity, a 501(c)(4) group founded by David Koch. AFP has been responsible for heavy advertising against the Affordable Care Act, and Reid made the hyperbolic claim that “all” of the “horror stories” being told about the ACA “are untrue.” He then cited two stories that he said were being promoted by Americans for Prosperity ads.

Reid, Feb. 26: Despite all that good news, there’s plenty of horror stories being told. All of them are untrue, but they’re being told all over America. The leukemia patient whose insurance policy was canceled, who would die without her medication. Mr. President, that’s an ad being paid for by two billionaire brothers. It’s absolutely false. Or the woman whose insurance policy went up $700 a month. Ads paid for around America by the multibillionaire Koch brothers. And the ad is false.

Reid went on to say that tales “made up from whole cloth” were being told in AFP ads and Republican stump speeches. But the two stories he cited are about real people, though the anecdotes may be misleading or not the full story.

The first example, about a leukemia patient whose individual insurance policy was canceled, was in an AFP ad. The second, however, about “the woman whose insurance policy went up $700 a month,” a story Reid said was in “ads paid for around America by the multibillionaire Koch brothers” was not, in fact, in an AFP ad. Instead, it was in the Republican response, given by Rep. Cathy McMorris Rodgers, to President Obama’s State of the Union address.

Reid’s spokesman told us that the senator decided to give his floor speech after reading a column by Paul Krugman of the New York Times that mentioned the story McMorris Rodgers had told of “Bette in Spokane.” A local newspaper found that the congresswoman exaggerated Bette’s plight.

McMorris Rodgers said Bette had sent her office a letter, saying “her premiums were going up nearly $700 a month.” The Spokesman-Review found the Bette in question, Bette Grenier, who said the $700 increase was one option given to her by her insurer, which was canceling the catastrophic plan she and her husband had purchased on the individual market. The increase would have been $648 per month, while another option would have been $500 more per month. Grenier also acknowledged that she could probably save more money on the state insurance exchange, but she told the newspaper, “I wouldn’t go on that Obama website at all.”

The Spokesman-Review reported that her catastrophic plan carried a $10,000 deductible but included four doctor visits without copays per year. Grenier told the paper the new options from her insurer had lower deductibles and broader coverage, but not the four free doctor visits. She and her husband had decided to go without insurance.

So, the brief anecdote in McMorris Rodger’s speech didn’t stand up to the facts. But the story wasn’t in an ad paid for by the Koch brothers, as Reid claimed.

 Not from ‘Whole Cloth’ or ‘Lies’

Reid went on to say that Republicans were making up stories out of “whole cloth” about individuals hurt by the Affordable Care Act. But neither of the anecdotes he cited were fabricated. In fact, we’re not aware of a story about the impact of the ACA that was completely made up. As with many political claims, the stories that are false or misleading have some basis in fact. (See our piece on an Arizona man with leukemia who initially told a local TV news reporter he’d have to pay $26,000 more to keep his doctor, but ended up keeping his doctor with a less expensive policy than he had before. His story was cited in an AFP ad.)

AFP did run an ad in Louisiana that used paid actors opening mail to find their insurance policies had been canceled. But even then, while the people weren’t real, the story of individual policies being canceled and replaced has been well documented.

On Feb. 26, Reid later backed down, a bit, from the “whole cloth” claim, saying, “I can’t say that every one of the Koch brothers’ ads are a lie, but I’ll say this: Mr. President, the vast, vast majority of them are.”

Still, the other example Reid had given — about a leukemia patient whose insurance policy was canceled — wasn’t “absolutely false,” as he had claimed. And certainly not “a lie.”

Glenn Kessler, our fact-checking colleague at the Washington Post, looked at the AFP ad featuring “Julie’s Story,” about the leukemia patient and gave it two out of a possible four Pinocchios.

In the ad, Julie Boonstra from Michigan says: “My insurance was canceled because of Obamacare. Now, the out-of-pocket costs are so high, it’s unaffordable. If I do not receive my medication, I will die.” Kessler wrote: “In order to properly compare the old [insurance] plan and the new plan, there needs to be fuller disclosure of the costs and out-of-pocket maximums before claims that the new plan is ‘unaffordable’ can be accepted at face value.”

Boonstra bought her insurance on the individual market and received a letter saying the policy would be canceled because it didn’t meet ACA requirements. But while Boonstra says her out-of-pocket costs are higher on a new plan offered by her insurer, her premiums were cut in half. She told the Detroit News that her new premium was $571 a month, down from $1,100.

As Kessler points out, that’s a $529 a month savings, or $6,348 a year, nearly as much as the out-of-pocket maximum under the ACA for individuals, which is $6,350 a year. Boonstra’s significant savings on her monthly premium may well make up for the higher out-of-pocket costs, which she says are “unaffordable” in the AFP ad.

So, “whole cloth,” “lie” and “absolutely false”? No, the AFP ad doesn’t reach that level of mendacity. “Not the full story” and “highly questionable” would be accurate descriptions. And Reid’s second example he attributed to the Koch brothers had nothing to do with them.

We have found fault with other AFP ads on the Affordable Care Act. This year, we said one ad about the ACA lacked context and offered a slanted view of the law’s impact. Another recycled an old, inaccurate claim about the law’s effect on premiums. But Reid went way too far in his criticism of the group.

– Lori Robertson

Update, March 11: The Detroit News reported on March 10 that Boonstra said her new policy was the Blue Cross Premier Gold health plan, which would save her at least $1,200 a year, even if her out-of-pocket expenses reached the plan’s maximum of $5,100. In light of that information, the Washington Post’s Kessler downgraded his rating to three out of four Pinocchios.

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AFP Distorts Begich’s Carbon Tax Stance http://www.factcheck.org/2014/02/afp-distorts-begichs-carbon-tax-stance/ Fri, 28 Feb 2014 18:44:35 +0000 http://www.factcheck.org/?p=82205 The conservative Americans for Prosperity claims Democratic Sen. Mark Begich “is on record supporting a carbon tax … that will cost the average family over $2,000 annually.” Not true. Begich hasn’t backed a carbon tax proposal, and the $2,000 figure is based on general assumptions, not any specific plan or piece of legislation.

In fact, what Begich has clearly supported is an amendment requiring any potential, but currently nonexistent, carbon tax revenue to be returned to the American people in some way. It was a vote to make a hypothetical tax revenue neutral, a factor that was not part of the “over $2,000″ calculation.

In reality, there is no legislation currently being debated in Congress that would institute a carbon tax, which would be a direct tax on the carbon content of energy sources including coal, oil and gas. Last year, Sens. Bernie Sanders and Barbara Boxer introduced a bill that would enact a $20-per-ton carbon fee and return 60 percent of the revenue to households. The bill was introduced and referred to committee on Feb. 14, 2013, and it hasn’t gone anywhere since. A group of four Democratic lawmakers also released a “discussion draft” of a carbon tax in March 2013, asking for comment on how a tax should be priced and structured, and how revenue could best be returned to the public.

“There’s nothing really on the table,” Charles Komanoff, director of the Carbon Tax Center, told us. “To my knowledge, there has never even been a hearing, even just an informational hearing on anything that is or resembles a carbon tax bill.”

Komanoff’s group, a nonprofit launched in 2007, supports a revenue-neutral carbon tax to reduce carbon dioxide emissions. Begich isn’t listed on the group’s website among the politicians voicing support for a carbon tax, and Komanoff said he wasn’t aware of the Alaska senator backing the idea.

The citations in the AFP ad don’t show Begich supporting a carbon tax, either.

Vague Ties to Carbon Tax

The AFP ad says Begich “is on record supporting a carbon tax, and even pushing Harry Reid to make it a priority.”

But neither of those statements are clearly supported by Begich’s votes and actions. The ad points to his March 2013 vote against an amendment to a Democratic budget resolution by Republican Sen. Roy Blunt to require 60 votes to approve a potential carbon tax in the future. AFP and other organizations wrote Blunt a letter, expressing support for the amendment, which, the letter said, would “create a procedural barrier against carbon taxes or fees in the future.”

Carbon tax opponents certainly would have appreciated Begich, and any other senator for that matter, voting for the Blunt amendment. But voting against a resolution to require a high-threshold for such a tax to pass the Senate at some unknown point in the future is not the same as voting in favor of the tax itself.

On the same day, Begich voted in favor of an amendment from Democratic Sen. Sheldon Whitehouse — who had introduced the “discussion draft” on the carbon tax with other lawmakers. Whitehouse’s amendment would have required any possible future carbon tax to be revenue neutral, with the money the government would receive from the tax being returned to the American people. That’s not a vote for a carbon tax, either.

The Carbon Tax Center certainly doesn’t count it as a show of support. James Handley, the group’s senior policy analyst, told us that the claim that Begich supported a carbon tax is “totally spurious.” Whitehouse’s resolution, Handley said, “would take the sting out of any carbon tax by shifting taxes off workers and onto polluters. Begich seemed to be saying ‘no’ to additional tax burdens, but ‘maybe’ to a tax shift.”

Neither the Blunt nor the Whitehouse amendment passed.

As for “pushing Harry Reid,” AFP highlights a letter Begich and other freshman Democratic senators wrote to the Senate majority leader in July 2010, a few months after the Deepwater Horizon oil spill in the Gulf of Mexico. The letter expresses support for comprehensive energy legislation, but it doesn’t say anything about a “carbon tax.” Instead, it says comprehensive legislation should include “making polluters pay through a price on greenhouse gas emissions.” That could mean a carbon tax, or it could be cap-and-trade, or it could mean another form of incentives or penalties. The letter doesn’t specify.

It goes on to say: “While each of us has individual priorities and concerns for our states and regions, we believe that the framework outlined above should guide energy legislation on the floor this year.”

Begich wrote another letter to Reid earlier that year saying that “none of the various proposals for economy-wide legislation sufficiently addresses Alaska’s unique situation,” according to a March 28, 2010, article in Petroleum News, a weekly based in Anchorage. Begich said in the letter that Alaska’s priorities for energy legislation would include increasing incentives for bringing Alaska’s natural gas to market, state sharing of offshore oil and gas revenues, funding for communities dealing with climate change effects such as town relocations, and more funding for government research of Arctic and climate issues.

We contacted Begich’s campaign to ask about his position, and spokesman Max Croes told us via email that Begich “does not support a Carbon Tax” and that the claim in the ad is “flat-out false.”

Last year, Begich released a radio ad, in response to robocalls from the National Republican Senatorial Committee that claimed he was a carbon-tax supporter. In the ad, Begich says: “I’m fighting against the carbon tax.” AFP uses that clip in its ad. The Begich campaign’s support for the radio ad doesn’t back up the claim that he’s “fighting against the carbon tax” — instead the campaign points to articles on Begich standing up for Alaska’s needs and taking divergent views from Democrats on oil issues.

As the 2010 letters to Reid show, Begich is in favor of energy legislation that addresses climate change. He told The Hill newspaper in August 2013 that “there’s no debate on the science.” He has supported renewable energy, and also increased oil and gas exploration in Alaska.

Analysis of a Phantom Bill

The AFP ad goes on to say the carbon tax that Begich supposedly supported “will cost the average family over $2,000 annually,” citing a Heritage Foundation analysis from January 2013. The implication is that Begich supported a plan that would have this impact on families, but Begich didn’t sign on to any specific proposal. In fact, there is no active legislation to which Begich could sign on, even if he wanted to. And the Heritage Foundation wasn’t analyzing any specific proposal, either.

Instead, Heritage developed its estimate using carbon-tax scenarios presented in the Energy Information Administration’s 2012 Annual Energy Outlook, which gives various metrics for energy demand and supply.

EIA considered the impact of imposing carbon taxes at two levels ($15 per metric ton and $25 per metric ton). It also considered a scenario in which companies make no capital investments in anticipation of greenhouse gas-reducing legislation. And the EIA presented a reference case, or “business-as-usual,” which assumes companies would make capital investments in anticipation of GHG legislation. Specifically, “the cost of capital for investments in GHG-intensive technologies … is increased by 3 percentage points to reflect the behavior of utilities, other energy companies, and regulators concerning the possible enactment of GHG legislation that could require owners to purchase emissions allowances” or invest in other emissions-reducing or offsetting measures, EIA said.

Heritage took the higher of the two carbon tax scenarios (the $25 tax) and compared that with the scenario in which companies wouldn’t make any adjustments in capital costs in anticipation of legislation. Using this maximum impact under the EIA scenarios, Heritage says a carbon tax would “cut the income of a family of four by $1,900″ in 2016 and cause “average losses of $1,400 per year through 2035.” It also would “raise the family-of-four energy bill by more than $500 per year.”

But Begich hasn’t backed any carbon tax proposal — let alone one that includes these specifics.

Also, the EIA carbon tax scenarios don’t account for any offsets, such as returning revenue gained from a carbon tax to the public, an idea Begich indicated he supported by voting for the Whitehouse amendment. If revenue were returned to the public, such as in the form of credits or other tax decreases, the impact on families’ bottom lines could be much different. The authors of the Heritage article argue that a revenue-neutral tax is politically impossible in Washington, but that’s speculation, of course.

In the end, the Heritage analysis — along with the ad’s other claims about a loss of Alaskan jobs and little help for the environment –  has nothing to do with Begich. He hasn’t signed on to any carbon tax plan.

– Lori Robertson

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In Florida Ad: Recycled Quote Still Wrong http://www.factcheck.org/2014/02/in-florida-ad-recycled-quote-still-wrong/ Tue, 11 Feb 2014 21:13:17 +0000 http://www.factcheck.org/?p=81472 A TV ad from the conservative Americans for Prosperity recycles an old  — and inaccurate — clip of Florida Rep. Steve Southerland blaming the Affordable Care Act for a “$1,200 increase” in health care premiums for the average American family.

That was wrong when Southerland said it in July 2012. And it remains so now.

The ad, which will run in Southerland’s Florida district for three weeks, is part of Americans for Prosperity’s push to boost Republican candidates in the 2014 midterm elections. Polls have shown Southerland is locked in a tight battle with Democrat Gwen Graham, a county schools official and the daughter of Bob Graham, a former Florida senator and governor.

While most of the group’s ads have focused on attacking Democrats, this ad praises Southerland for his steadfast opposition to the Affordable Care Act. In fact, the Southerland clip used in the ad is lifted from a short House floor speech Southerland delivered on July 10, 2012, in favor of a bill to repeal the health care law — marking the 10th time Southerland voted for repeal.

The ad begins with a narrator saying that Obama “told us the Lie of the Year” — a reference to PolitiFact’s annual award for political dishonesty — in claiming, “If you like your health care plan, you’ll be able to keep your health care plan.”

“But our congressman, Steve Southerland, didn’t buy it,” the narrator says. It then cuts to a clip of Southerland speaking about the health care law.

“One million Americans will be at risk of losing their own current health care plan,” Southerland says. “The average American family will see a $1,200 increase in their health care premiums.”

The ad doesn’t indicate when Southerland made these comments, but it turns out they were made on the House floor on July 10, 2012, (page H4740), in support of a bill to repeal the Affordable Care Act.

Southerland, July 10, 2012: H.R. 6079 will end the individual mandate, the tax hikes on the small businesses–of which my family has been proud owners for many, many generations–the devastating cuts to Medicare, and the government intrusion into Americans’ private health care decisions.

While I am disappointed with the Supreme Court and with the decision that it made by not striking down the president’s health care bill, I remain committed to its full repeal. Under the health care law, over 1 million Americans will be at risk of losing their own current health care plans. The average American family will see a $1,200 increase in its health care premiums. Many of those families I know in our family community are going to be devastatingly impacted.

As I have said time and time again, bad procedure leads to bad policy, and two years ago–my goodness–on full display, we saw bad procedure. That’s why I stand here ready to cast my 10th vote in favor of repealing the president’s health care law.

Southerland was basing his claim about a $1,200 increase in family premiums on a 2011 report from the Kaiser Family Foundation that documented a 9.4 percent increase in the cost of average annual premiums for employer-sponsored health insurance from 2010 to 2011, an increase that raised family premiums from $13,770 to $15,073. That’s a $1,303 increase. It marked a significant increase from the 3 percent growth rate in 2010.

First, that information is now outdated. Two more years of data on health care premiums are now available. And the picture has changed dramatically.

Second, the $1,300 increase is the total cost for both employers and employees — not $1,300 for the average family. In fact, the Kaiser Family Foundation report said that the increase in what workers contribute wasn’t “a statistically significant increase over the 2010 values.”

Third, and perhaps most important, Southerland’s comment ascribes all of the increase in family premiums to the Affordable Care Act. And that’s wrong. Health care costs had been rising year after year, long before the Affordable Care Act was passed. So it’s absurd to claim the law is responsible for all of the increase.

Here’s a Kaiser Family Foundation breakdown of average annual premiums for single and family coverage from 1999 to 2013.

The chart below shows the percentage change in the average cost of annual premiums for family plans.

As the chart indicates, the 9.4 percent uptick in 2011 was significant, but hardly unprecedented. It also shows the increase slowing in the subsequent two years, below the historical average. In other words, it makes no sense to associate the entire 2011 increase to the Affordable Care Act.

Soon after the 2011 report was released, Kaiser Family Foundation President and CEO Drew Altman wrote in a column that the law was responsible for a “modest” 1 percent to 2 percent increase.

Altman, Sept. 27, 2011: Critics of the national health reform law passed in 2010 like to blame everything but the weather on “Obamacare,” but regardless of how you feel about the Affordable Care Act, its effect on premiums this year is modest. Most of the law’s provisions don’t go into effect until 2014. The two biggest changes this year allow young adults up to age 26 to stay on their parents’ insurance policies and require some insurance plans to cover preventive services at no cost to patients. These are popular provisions that provide real benefits, and combined they account for about one to two percentage points of this year’s premium increase.

When similar claims to Southerland’s were made by Republicans after the report was released, we also consulted with several experts  — as well as an independent study by a large private research firm — and all placed the effect of the health care law on premiums in the range of 1 percent to 3 percent.

So Southerland’s claim that the health care law was responsible for the entirety of the average premium increase was wrong when he said it in July 2012. Moreover, 2011 was a bit of an anomaly. As the above chart shows, average annual premiums for family coverage increased 4.4 percent in 2012 and 3.8 percent in 2013. Both of those figures are well below the average 7.7 percent increase between 1999 and 2013.

Just as premium growth has slowed, so, too, has national health care spending. President Obama has pointed to the historically low growth in spending to claim that the health care law is “bending the [health care] cost curve.” But we concluded that, too, was a great exaggeration, because experts said the down economy was the overwhelming reason for the decrease.

Matt McCullough, a spokesman for the Southerland campaign, said it was a bit unfair to fact-check a comment Southerland made in July 2012.

“That’s not something we’re still saying,” said McCullough, adding that Southerland still vehemently opposes the Affordable Care Act and that it is a “costly proposition.”

We can sympathize with a campaign having to defend a year-and-a-half-old quote used by an outside group in a TV ad. But the ad doesn’t make clear that the quote is old and based on an outdated report. Besides, it was wrong when Southerland said it in July 2012 — and it’s wrong now.

– Robert Farley

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