Facebook Twitter Tumblr Close Skip to main content
A Project of The Annenberg Public Policy Center

NRCC Attack Ad Misleads Iowa Voters

A Republican TV ad falsely claims that businesses “are forced to drop health care coverage” and families are “losing health care benefits” under the new federal health care law. “That’s what’s happening,” the ad says. But that’s not happening now. The claim is based on a July survey of corporate executives and human-resource officers who were asked if they expect their companies to drop insurance coverage in the next one to five years.

The survey found that “9% of companies representing 3% of the workforce anticipate dropping coverage in the next 1-3 years.” A third of employers said they would likely consider dropping health care coverage in three to five years if the “essential health benefits” required by the government are more generous than they currently provide.

But none of that has happened. The requirement that some businesses provide health insurance or pay a penalty does not take effect until Jan. 1, 2014.

Also, the ad doesn’t mention that the law is also expected to increase the number of insured Americans “by 14 million in 2014 and by 29 million or 30 million in the latter part of the coming decade,” according to a nonpartisan Congressional Budget Office report issued in July.

That’s NOT What’s Happening

The National Republican Congressional Committee on Sept. 16 began running a TV ad in Iowa’s 1st Congressional District against Rep. Bruce Braley that attacks the three-term Democrat for voting for the federal health care law. Braley did vote for the Patient Protection and Affordable Care Act, which President Barack Obama signed into law on March 23, 2010.

The ad focuses on the impact of the new law on businesses and their employees. It claims that businesses “are forced to drop employee health care coverage” and, as a result, there are “families losing health care benefits.”

The NRCC cites a July 24, 2012, Wall Street Journal article to support its claim that businesses are dropping health care coverage. The article was about a survey conducted by Deloitte Consulting. The firm surveyed corporate and human-resources officers at 560 companies that offer benefits and have 50 or more employees. They were asked, “Given what you know or have heard, do you agree or disagree with the following statement: ‘My company is anticipating dropping health insurance coverage in the next one to three years?'”

The question was not specific to the health care law. The Deloitte survey asked about the health care law and the future of health care coverage in general. In explaining its methodology, Deloitte says: “The 32-item questionnaire probed opinions about the ACA [Affordable Care Act] and anticipated strategies for employee health benefits coverage and cost containment.”

The survey found that most employers don’t intend to drop health care, and those that do represent about 3 percent of the workforce.

Deloitte, July 2012: Most do not intend to drop health benefits coverage. 9% of companies representing 3% of the workforce anticipate dropping coverage in the next 1-3 years, versus 81% of companies representing 84% of the workforce which plan to continue. 10% of companies representing 13% of the workforce are not sure. Prohibitive cost is the driver that may lead employers to consider dropping coverage.

The 3 percent estimate is roughly in line with what the nonpartisan Congressional Budget Office estimates — although over a much longer period of time.

In a July report on the impact of the health care law on insurance coverage, CBO estimates that a net 3 million to 5 million Americans may lose their employer sponsored coverage from 2019 to 2022. That’s less than 3 percent of the 161 million Americans who CBO estimates would have had coverage under the prior law. But that includes people who choose to get health insurance elsewhere, not just because employers will stop providing coverage.

The Deloitte survey also asked about seven factors that may cause employers to consider dropping coverage further in the future — in three to five years. Five of those factors dealt with the the health care law. For example, 34 percent said they were “likely” to consider dropping coverage if the “benefits in the ‘essential benefits package’ are more generous” than they currently provide. And, unrelated to the health care law, 16 percent of respondents said that their companies are likely to consider dropping coverage if their competitors do.

In any event, both the Deloitte survey and the CBO report deal with possible future scenarios — not “what’s happening,” as the NRCC ad says.

Also, the ad doesn’t mention that the law is expected overall to increase insurance coverage.

In the July report, the CBO and the staff of the nonpartisan Joint Committee on Taxation estimate that the law “will reduce the number of nonelderly people without health insurance coverage by 14 million in 2014 and by 29 million or 30 million in the latter part of the coming decade.” That will happen largely by expanding Medicaid eligibility and providing government subsidies for low- and middle-income families.

The ad also claims that the health care law will impose “higher taxes” and result in “lost jobs,” two claims that we have written extensively about:

  • The health care law will have little effect on employment, as we have reported before. The CBO estimates that the labor supply will be reduced by 650,000, but mostly because Americans eligible for government health-care subsidies will be better off financially and can afford to cut back on the number of hours they work or retire altogether.
  • The health care law does contain an estimated $409.2 billion in new tax revenue over 10 years (2010 to 2019), mostly on high-income taxpayers, according to the nonpartisan Joint Committee on Taxation. As we have written before, more than half of that — $210.2 billion — would be come from higher Medicare payroll taxes and investment income taxes on individuals who earn more than $200,000 and couples who make more than $250,000.

— Eugene Kiely