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A Project of The Annenberg Public Policy Center

Liberal Ads Oversell Health Care Law

A liberal group has launched several radio ads criticizing House Republicans who voted to repeal the health care law. But some of the claims lack needed context and may give listeners the impression that the law’s benefits are more extensive than they really are.

Americans United for Change produced the ads in conjunction with the liberal blogs the Daily Kos and Blue America, and so far, they target Reps. Paul Ryan of Wisconsin, Charlie Bass of New Hampshire, Sandy Adams of Florida and Leonard Lance of New Jersey. The ads say the lawmakers’ vote for repeal was a vote to "raise health insurance premiums, take away prescription drug benefits for seniors," and, in some of the ads, "lower doctors’ incomes." In other words, the ads are claiming that the law would lower premiums, give drug benefits, raise incomes. We’ll take each claim in turn.

Does the health care law lower premiums? For those who get federal subsidies, sure. And the law also provides tax credits for small businesses that would lower their total costs, if they’re already providing health insurance. But overall, the Congressional Budget Office has said the law won’t change premiums for most Americans significantly, compared with what premiums would have cost without the law. That’s for employer-sponsored plans. The CBO actually said for those buying insurance on the individual market, premiums would go up — not down — but more than half of those purchasing their own plans would get subsidies that reduce their out-of-pocket costs substantially.

How does Americans United for Change justify its claim? The group pointed us to a report from the Department of Health and Human Services that claimed "savings could be as much as $2,300 for middle-income families purchasing through Exchanges." The partisan report cites the CBO, but skews what the agency said. CBO predicted a sizable increase in the average premium in the individual market — 10 percent to 13 percent in 2016. The reason is that benefits will improve for these plans, as they are required to meet minimum standards. The administration’s report said that families would save "as much as $2,300 per year … compared to individual market coverage with the same level of benefits without the law." That’s not the same as seeing a lower premium than families have now, necessarily. If a family’s plan includes the minimum benefits required by the new law, then that same plan could cost less, according to the administration. But if that family has a cheap, bare bones plan, it will pay more — and get more in benefits.

Americans United for Change is relying on a misleading report that cherry-picks CBO’s analysis. For instance, the report cites CBO statistics on how certain aspects of the health care law would lower premiums for those in the individual market, but it ignores the fact that the CBO estimated a larger increase in premiums because of an expansion in the benefits in those plans. Here’s one more example of how the support for the ad’s claim is flawed. The report said this about premiums for small-employer plans:

HHS, Jan 28: CBO estimates that premiums in the small group market could be up to 2 percent lower than they would have been without the Affordable Care Act.

But there’s no mention that CBO said premiums could also be 1 percent higher.

CBO, Nov. 30, 2009: In the small group market … CBO and JCT estimate that the change in the average premium per person resulting from the legislation could range from an increase of 1 percent to a reduction of 2 percent in 2016 (relative to current law).

There are aspects of the law that will lower premium costs for some, such as the subsidies already mentioned. CBO also says that small-business tax credits will lower premiums for some employees.

CBO: A relatively small share (about 12 percent) of people with coverage in the small group market would benefit from that credit in 2016. For those people, the cost of insurance under the proposal would be about 8 percent to 11 percent lower, on average, compared with that cost under current law.

But the impact on premiums isn’t expected to be as large as the radio ads make it sound.

Would repealing the law "take away prescription drug benefits for seniors"? It would nullify the law’s provision to close a "doughnut hole," or gap in prescription drug coverage for Medicare beneficiaries. So, those seniors who find themselves affected by the gap benefit from the health care law. Currently, about 4 million seniors hit the gap and have to pay full drug costs.

Would repealing the legislation "lower doctors’ incomes"? That claim refers to a provision to give bonus payments this year to primary care physicians who see Medicare patients. So, the law does provide a benefit for some primary care doctors. Medicare is required to pay an extra 10 percent bonus to doctors, who, according to the American Academy of Family Physicians, "meet a minimum requirement of 60 percent of their allowed charges under the Medicare physician fee schedule." Also, in 2013, state Medicaid programs are required to pay primary care providers the same rates as Medicare.

The ads truthfully say that these members of Congress enjoy good health benefits as federal employees, stating that the lawmaker "gets affordable health care, with protections against insurance companies cutting him and his family off. No lifetime limits. No annual caps. No preexisting conditions." The spots then claim that the lawmaker "voted to deny you and your family these same protections." It’s true that the health care law extends those protections to all Americans, but it’s also true that many persons have generous health plans through their employers, much like the plans offered to federal employees.