President Barack Obama made some exaggerated claims during a recent speech in Cleveland about the Affordable Care Act and the House Republican proposal for Medicare.
The president said his health care law is "reducing the overall costs - $1,800 in people's pockets." The $1,800 is not a reduction in insurance premiums, but rather the difference between the cost of the average employer-sponsored plan in 2014 and what the average premium would have been if based on average rate increases from 2000 through 2010. The calculations were done by White House economic advisers, but even they say the Affordable Care Act isn't responsible for the full $1,800 difference.
Obama also said the GOP budget would "gut the guarantee at the center of Medicare by turning it into a voucher program." The House plan makes significant changes, but it keeps traditional Medicare as an option. Future beneficiaries (those currently 55 and under) would receive a government subsidy to purchase insurance on a newly created Medicare exchange once they are eligible for Medicare. The subsidies can be used to purchase a private plan or traditional fee-for-service Medicare plan. Congressional experts say a plan like this one would reduce premiums by 6 percent on average in 2020. But the Congressional Budget Office also said that the cost would vary by region and that in "many regions" those who chose to remain in a traditional fee-for-service Medicare plan "would pay higher premiums than they would under current law."
8 million could become unisured
The Supreme Court in March heard arguments in King v. Burwell, a case about the Affordable Care Act's tax subsidies. The plaintiffs focus on language in the law about subsidies being available for those enrolled in an exchange "established by the State." The federal government, meanwhile, argues that the law, as a whole, makes clear subsidies should be available for those enrolling in any exchange, whether established by the state or federal government. A ruling in favor of the plaintiffs could lead to the loss of subsidies for those who receive them in the 34 states with federal exchanges - if the states don't take action to set up their own exchanges.
The New York Times reported that 7.5 million could lose their subsidies, a number that comes from a Kaiser Family Foundation estimate for those qualifying for subsidies in federally run marketplaces as of mid-February this year. The Urban Institute estimates that 8.2 million would become uninsured in 2016 if the Supreme Court rules in favor of the plaintiffs, and the Rand Corp. estimates 8 million would become uninsured in 2015.
The individual mandate requires the young and healthy to have insurance, and the subsidies make it more affordable for those with low income. Without the subsidies, some would be exempt from the mandate because coverage is no longer deemed affordable. And those most likely to hold onto their insurance despite higher costs are older, and less healthy, individuals who most need coverage. The risk pool becomes unbalanced, and the cost for insurers, and consequently the price of premiums, goes up.
The Urban Institute estimates in a January report that unsubsidized premiums would increase by 35 percent, on average, in the marketplaces in those 34 states in 2016. An analysis by the Rand Corp., also released in January, said premiums in those states would increase by 47 percent. These estimates are based on the 34 states with federally run marketplaces not taking action to set up their own exchanges. If some do, or other aspects of current law change, then these estimates would change.
Chip Tuthill lives in Mancos. Website used: wwww.factcheck.org
