May 24th, 2018

The Fact Checker: The Truth Behind the Rhetoric

Fact-checking Dems' rhetoric on the GOP health-care bill

 Michelle Ye Hee Lee

By Michelle Ye Hee Lee The Washington Post

Published March 20, 2017

Fact-checking Dems' rhetoric on the GOP health-care bill

Democratic lawmakers have made a number of misleading claims about the House Republican replacement bill for the Affordable Care Act and findings in the Congressional Budget Office report. We compiled a roundup of their talking points.

"Is it an act of mercy to throw 24 million people off of health insurance, so Republicans can hand billionaires a massive new tax giveaway?"

- House Minority Leader Nancy Pelosi, D-Calif., news conference, March 16

"But what this bill does is it takes away health care from 14 million people in the next year, 24 million over ten years."

- Rep. Debbie Wasserman Schultz, D-Fla., interview on CNN's "New Day," March 16

"Actually, according to the CBO score, 14 million people will lose their insurance next year and 24 million people ultimately will lose their insurance."

- Rep. Linda T. Sanchez, D-Calif., news briefing, March 15

The two headline-grabbing estimates from the CBO report have been taken out of context by some lawmakers, including Pelosi and Sanchez. The CBO estimated that under the GOP replacement bill, 14 million fewer people would be insured in 2018 than under the current health-care law and 24 million fewer people insured by 2026. But this does not mean all of the 14 million or 24 million will be "thrown off" health insurance or "lose" health insurance.

Some of the people who would be uninsured would choose not to have insurance, because they had decided to obtain health insurance only to avoid a penalty under the ACA's individual mandate; the replacement bill eliminates the mandate. Others, such as elderly Americans, would not get insurance because the premiums are too high. (The replacement bill would allow the elderly to be charged five times as much as the youngest insured, compared with a 3:1 ratio under the ACA.) Many of the uninsured people would lose insurance because of reductions in Medicaid enrollment - after some states discontinue the Medicaid expansion under Obamacare.

The CBO estimated that the GOP bill would lead to 14 million fewer people insured than under Obamacare by 2018. Six million of 14 million would be people who now have coverage in the individual insurance market; 5 million would be people with coverage under Medicaid; and 2 million would be people with coverage through their employers, who also would no longer be required to provide insurance. (The remainder come from other insurance shifts.)

"Most of the reductions in coverage in 2018 and 2019 would stem from repealing the penalties associated with the individual mandate," the CBO found.

The CBO estimated that health insurance premiums would be 10 percent lower in 2026 than projected under current law. That's because insurance premiums would spike for older people (20 to 25 percent higher for a 64-year-old) and many older people would drop out of the insurance markets. Then the pool of people getting insurance would be younger and healthier, leading to lower premiums than currently projected. But it's important to remember that it does not mean that premiums would decline by 10 percent, just that they would increase at a lower rate than now projected.

"If this legislation is passed and millions of people are thrown off of health insurance, not able to get to a doctor when they must, thousands of Americans will die." - Sen. Bernie Sanders, I-Vt., quoted in news article, March 13

Sanders repeated a version of a Four-Pinocchio claim after the CBO report was released this week. However, Sanders spoke in broader terms this time ("thousands of Americans will die") rather than using a specific number (36,000) that was so dubious that it earned Four Pinocchios.

Previously, Sanders had cited a calculation from ThinkProgress, a left-leaning website, assuming that 29.8 million people would lose their insurance and that one person will die for every 830 people who lose insurance.

As we noted in our January fact-check, the 29.8 million figure was a pretty big assumption. It was based on a report that assumed Republicans will repeal parts of the law through the reconciliation process without outlining any replacement plan, thus leading to a near collapse of the nongroup insurance market.

The actual GOP replacement plan, of course, doesn't support those assumptions. The CBO found that 24 million people would become uninsured compared with the current law, over 10 years (not immediately). The CBO didn't calculate the bill's impact on mortality.

That takes away one of the main assumptions made in the original calculation on which Sanders relies, and it makes his claim questionable. Plus, he again said that thousands "will" die - rather than "could" die - stating calculations based on assumptions as a definitive fact.

"#ReadtheBill & you'll see #TrumpCare would allow insurance execs to personally make millions off your health care."

- Sen. Tammy Baldwin (@SenatorBaldwin) March 8, 2017

Baldwin's tweet is misleading. The GOP replacement bill would repeal an Obamacare cap of $500,000 on how much insurance companies can deduct on their tax returns from their chief executives' salaries. The cap applies to how much corporations can deduct - not the individual executive's tax liability, as PolitiFact Wisconsin noted.

According to CNNMoney: "Five major insurers paid their CEO's $73 million in 2015, the most recent year for which pay has been reported. Only $2.5 million of that was deductible under Obamacare tax laws. But more than $70 million of that would be deductible under the proposed Republican legislation."

In general, other types of businesses face a $1 million deduction limit for executive compensation. The cap also restricted corporations from making tax deductions on stock options and other "performance-based" pay for the executives. So Baldwin and others argue that eliminating the cap would give incentive to companies to pay their executives more, since they'd make up for some of it through lower taxes. Removing the cap would ultimately boost the incomes of top executives, who stand to gain from their companies' profitability, they say.

So while getting rid of the cap may make it easier for insurance companies to boost executive compensation, Baldwin goes too far in saying that the bill would allow executives to "personally make millions."

Plus, we'll note that top executives already make millions. The chief executives of Aetna and Cigna received $17.3 million in 2015, UnitedHealth's chief executive had $14.5 million in total compensation, and Humana's chief executive received $10.3 million, CNNMoney reported.