Statewide: In the first Wisconsin U.S. Senate debate and in two television ads Sen. Ron Johnson is making a series of highly misleading claims about health care cost inflation. Johnson said in the first debate that he was seeking to “turn back the clock” by repealing the Affordable Care Act (ACA). But his deceptive claims hide from public view the consequences of going back to the days when health insurance policies had dangerous gaps in coverage and discrimination against people with pre-existing conditions was legal.
Leading into the second and final debate Wisconsin U.S. Senate debate tonight, Citizen Action is providing a brief analysis of the major health care claims Senator Johnson has made so far.
Deception 1: Johnson Claims there no difference in number of uninsured people in Wisconsin before and after the passage of the ACA.
Analysis: In the first debate Johnson said Wisconsin had 95% of residents covered by insurance before the passage of ACA, and 95% after passage.
According to the most recent federal data, the number of uninsured people in Wisconsin dropped by 195,000.
In percentage terms, this means the rate of uninsured in Wisconsin dropped from 9.1% to 5.7%.
Deception 2: Sen. Johnson claimed in the first debate and two television ads that Wisconsin health insurance premiums have gone up very dramatically because of the Affordable Care Act.
Analysis: In the debate Johnson cited the conservative think tank the Manhattan Institute, which strongly opposes the ACA. The estimates provided by this organization are not reliable because the data they use is not independently verifiable. Johnson also overstates their estimates. In conclusion, Johnson deceptively creates the impression that health insurance inflation is worse now than it was before ACA.
The Manhattan Institute research Johnson relies on is essentially junk social science. Reliable data does not exist for prices on the individual marketplace prior to the passage of ACA. This is because before ACA there was not anything approaching the same level of public transparency. In fact, price data was considered proprietary by the insurance industry. That is why Kaiser Family Health Foundation and other reliable research organizations never made such projections. Larry Levitt of Kaiser told Politifact in 2013 that “reliable data is unavailable” and that “there is not good information” about what people paid on the individual insurance market before the passage of ACA. He concluded that “insurance companies” know the prices “but they keep it to themselves.”
Johnson seems to be misstating the Manhattan numbers. He claimed in the first debate premiums went up from 80% to 300% across 6 demographic groups since the passage of the ACA. In his two campaign ads which focus on health care he claims premiums doubled or tripled. But even if we take these estimates at face value, which we should not, they actually show an increase of 38% to 137%.
Johnson is deceptively silent on the positive impact of tax credits on affordability. In Wisconsin 89% of the 239,000 consumers on the ACA marketplace received average tax credits of $3,780 a year to make premiums more affordable. As a result, 50% of Wisconsin Marketplace enrollees obtained coverage for $100 or less after any applicable tax credits in 2015, and 83 percent had the option of doing so. These tax credits will disappear if Sen. Johnson is successful in repealing the ACA.
The examples Johnson gives of individuals whose premiums went up are highly misleading. In the old system these people had no guarantee that their rates would not skyrocket as they aged and acquired health conditions.
- Even with this year’s large increase in premiums, health insurance inflation was worse before the passage of ACA. According to a Commonwealth Fund study, premiums on the Wisconsin individual market increased by an average of 13.2% in the last three years before passage of the ACA (2008-2010). But premium increases in the first three years after passage were much lower than before according to a report by Price Waterhouse Cooper. Even taking into account this year’s 15.9% increase, premiums for the most popular ACA marketplace level of coverage could go up an average of 7.5% in Wisconsin over the subsequent four years (2014-2017). As the rates are not yet final, the increase may be lower.
Conclusion: Johnson’s claim that health insurance inflation became a problem after the passage of ACA, and that rates have doubled or tripled because of it, is highly misleading. Health care inflation was even higher before the passage of ACA, and remains a problem that needs to be addressed through additional reform. As Citizen Action of Wisconsin documented last week, further health care reforms which build on the ACA are the best way to bring rising prices under control.
Deception 3: Sen. Johnson is performing a bait and switch by comparing substandard “lemon” plans which were legal before the passage of ACA to quality health coverage which must cover all essential services and do not have dangerous gaps in coverage.
Analysis: Senator Johnson’s creates the false impression that he is making an apples-to-apples comparison of the cost of comparable health insurance before the passage of the ACA and after. Two of his proposed solutions in the first debate reveal that he is seeking to deregulate health insurance, creating a flood of substandard “lemon” plans which don’t cover basic services, and expose consumers to the risk of not getting needed treatment or facing medical bankruptcy in the case of major illnesses or injuries.
The unreliable Manhattan Institute numbers used by Johnson do not take into account the higher value of ACA plans which must cover all necessary medical services. Before the passage of ACA, health insurance plans on the individual market often had annual limits, lifetime limits, and major holes in coverage. Some even carved out major diseases. This is like comparing a Yugo to a Ford, except in the case of health insurance the holes in coverage can be a life and death issue, and result in financial ruin, in the case of a major injury or illness.
In the first debate Johnson said he would change the “federal definition of health care” which he said “is what has driven premiums through the roof.” He also said he would legalize the sale of health insurance policies across state lines. These are both code words for deregulating health insurance, and going back to the days when substandard “lemon” plans were legal.
Conclusion: Johnson believes that the way to make health insurance affordable is to dangerously lower the quality of coverage which exposed Wisconsin families to unacceptable health risks and possible financial ruin.
Deception 4: Senator Johnson asserts that health insurance premiums are rising because of the Affordable Care Act.
Analysis: Rising health insurance premiums are not being driven by the Affordable Care Act (ACA), but by the reemergence of health insurance industry discrimination and price gouging by pharmaceutical corporations and medical service providers.
Conclusion: Reforms that hold pharmaceutical corporations and medical providers accountable for rising prices are the best way to make health insurance more affordable. Politicians like Johnson who want to “turn the clock back” are blocking the next essential stages of health reform.
For Immediate Release--October 18, 2016
Contact(s): Robert Kraig (414) 322-5324 email@example.com
Kevin Kane (414) 550-8280 firstname.lastname@example.org