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A Project of The Annenberg Public Policy Center

ACA Hurts ‘Struggling Families’?

A conservative group is attacking Democratic Rep. Ron Barber of Arizona with an ad that claims the Affordable Care Act “means higher costs for struggling families.” It may mean higher costs for some, but hundreds of thousands of state residents are expected to qualify for Medicaid because of the law, and others will qualify for federal subsidies to buy coverage.

Barber, who was an aide to former Rep. Gabrielle Giffords and won a special election for her seat, is seeking reelection this year. The ad, from the David Koch-founded Americans for Prosperity, starts off by highlighting President Obama’s claim that “if you like your plan, you can keep your plan” by calling it the “lie of the year.” Obama’s claim also made our list of “Whoppers of 2013,” as well as whoppers lists in past years. But then the ad offers a slanted view of the impact of the law, ultimately tying the claims to Barber.

It shows the news headline, “Arizona Man: Obamacare Will Double My Premiums,” while an announcer says, “Obamacare means higher costs for struggling families.” As we’ve said many times, the health care law will affect Americans differently. Some who buy their own insurance will pay more and some will pay less, depending on individual circumstances, such as their health status, age and income level. Some families — whether they’re “struggling” or not — may face higher costs. But the ad’s blanket statement is contradicted by the fact that the law expands Medicaid eligibility, offers federal subsidies to low- and mid-income Arizonans who buy their own insurance, and reduces the number of uninsured.

Arizona Gov. Jan Brewer, a Republican who opposed the Affordable Care Act, nevertheless chose to expand Medicaid per the law, because of the direct impact such an expansion would have on the state. Brewer’s office estimated that an additional 240,000 Arizonans would have Medicaid health insurance through the expansion, and the state would be able to continue to provide Medicaid to 50,000 adults without children in their homes. The Kaiser Family Foundation estimated that 448,000 Arizonans would join Medicaid because of the law by 2022, with 238,000 newly eligible under the law (similar to the state’s estimate) and another 210,000 who would have been eligible in the past signing up, at least partly due to the law’s requirement to have insurance or pay a penalty.

In signing the law that expanded the state’s Medicaid program, Brewer said that “it will extend cost-effective care to Arizona’s working poor, using the very tax dollars our citizens already pay to the federal government,” and she thanked the Arizona Legislature “for joining me in putting the people of Arizona first.” She told personal stories of a breast cancer survivor helped by Medicaid and a man without insurance facing large medical bills:

Brewer, June 13, 2013: I remember Laura Gargiulo, a single mother who was diagnosed with Stage 3 breast cancer. She credited Arizona’s Medicaid program, known as AHCCCS, with saving her life. Or Justin Smith. Like so many others, he lost his job – and his health insurance along with it – during the Great Recession. Then he got sick. Emergency medical care saved his life, but he is now strapped with $200,000 in hospital bills. Hundreds of thousands of uninsured Arizonans walk the same tightrope every day, knowing they are a single car wreck, illness or accident from financial ruin. Through this process, I have been humbled by the support of Arizonans like Laura and Justin. They are my strength.

The Affordable Care Act expands Medicaid eligibility to 138 percent of the federal poverty level. That was $15,856 for a single person and $32,499 for a family of four for 2013. State eligibility levels vary, but in Arizona, the ACA expansion increases coverage for parents, children ages 6 to 19, adults with no children in the home, and the aged, blind and disabled. Those groups had qualified for Medicaid if their household incomes were less than 100 percent of the poverty level before the ACA, though during the recent recession, the state had frozen eligibility for adults without children.

The health care law also provides federal subsidies to those earning between 100 percent and 400 percent of the poverty level, meaning single adults making $11,490 to $45,960 and a family of four with a household income between $23,550 and $94,200 in 2013. Of course, some people could still pay more for insurance than they did before, particularly if their incomes are at the high end of those ranges and they had inexpensive coverage in the past. But others will pay less, and some will gain insurance, leaving the ranks of the uninsured.

From October 1 through Dec. 28, nearly 28,000 Arizonans selected insurance plans on the federal marketplace, with 68 percent of the plans purchased with subsidies, according to figures released by the Department of Health and Human Services. Early Medicaid numbers show that 102,548 Arizonans were determined eligible for Medicaid in October and November, though the numbers aren’t broken down by those eligible because of the expansion.

As for a headline in the ad — “Arizona Man: Obamacare Will Double My Premiums” — that’s from a Phoenix television news story about a man whose insurance carrier pulled out of the individual market in all states, citing “increased regulation” under the ACA. The man told the TV station, KTVK, that he had paid $268 per month for his insurance, but when he checked the rates on the federal exchange, the premium for a comparable plan would be $563. The news story doesn’t say whether he purchased that plan, or if he qualified for subsidies or would pursue insurance through other means. We were not able to contact the man.

It’s certainly possible that he, and others, will pay more for their insurance. As we’ve explained, the law changes the individual insurance market, barring insurers from rejecting applicants with preexisting conditions, or charging them more. Insurers can’t vary price based on gender, either, but can vary premiums based on age (to a limited degree), geography, family size and tobacco use. The law also requires policies to cover certain essential benefits, including vaccines, mental health care, prescription drugs and maternity care. These changes are good news for some — particularly those who paid higher rates or were denied due to health conditions — and bad news for others — particularly healthy folks who were happy with more limited insurance coverage.

There are plenty of anecdotes for both supporters and opponents of the law. For instance, a self-employed Arizona man with leukemia had his individual insurance plan canceled when his insurer exited the market, but in the end, he was able to find a cheaper policy that included his doctor in its network. Conservative groups, including Americans for Prosperity, had highlighted his case, after the man told an Arizona TV station that he would have to pay $26,000 to keep his doctor. We spoke with him a month later, by which time he had found a plan with lower premiums and out-of-pocket costs on the individual market.

Competing anecdotes can’t tell us how many Arizonans are saving money and how many are paying more. But we do know about 240,000 residents will be newly eligible for free or low-cost coverage through Medicaid.

The ad further contends that the law means “the loss of trusted doctors for the sick,” but there’s no citation of any report or data to back up that general claim. There may be some individual stories out there, but how many? We asked Americans for Prosperity for support for the ad’s claims, but have not received a response.

Context, Please

The ad also shows a headline that reads, “About 283,000 Arizonans May Have Health Plans Canceled.” That’s from a short story on the website of Arizona Public Media, which reported that 283,000 Arizonans have plans on the individual market, according to an analysis by Families USA.

It’s unknown whether all of those people received cancellation notices from their insurers because their plans didn’t meet requirements of the Affordable Care Act, such as coverage of minimum benefits for individual market plans. It’s also unknown how many of them will wind up with better coverage for less money because of government subsidies. In fact, the Arizona Public Media story quoted Ron Pollack, executive director of Families USA, a group that supports the health care law, as saying most of these Arizonans could be better off in the end. He said 74 percent of those buying their own insurance in the state would qualify for federal subsidies.

“All together about 3 out of every 4 people in the individual market will qualify for these subsidies,” Pollack was quoted as saying. “And that means that people who are getting these notice, once they learn about what they can get from the Affordable Care Act can be considerably better off than they were before.”

In 2010, Families USA estimated that 846,000 Arizonans would gain health insurance because of the health care law, a number it calculated based on a Congressional Budget Office analysis.

The ad’s announcer also says the law leads to “diminished care for those in need” — of course hundreds of thousands of uninsured Arizonans stand to gain care — and shows a graphic saying, “Tucson Doctor: Less Care and Poorer Care Despite Higher Cost.” The doctor referenced, Dr. Jane Orient, is the executive director of the conservative Association of American Physicians and Surgeons, which opposes the ACA and has filed a lawsuit challenging the constitutionality of the individual mandate. The group says its members appear in the media and on blog sites to “counter the emotional arguments for socialized medicine.” Orient is a doctor of internal medicine who provides consultations and will not accept any insurance payments or government insurance programs. She wrote an opinion piece in The Washington Times in 2012 that is cited in the ad.

The AFP ad is one of many launched by the organization using the Affordable Care Act to attack Democrats running for reelection in Congress.

— Lori Robertson