Frank Guinta claims Obamacare is not working, his numbers don't add up
In his July newsletter, embattled Congressman Frank Guinta says he supports the goals of the Affordable Care Act – “I believe every individual should be able to access high-quality, affordable healthcare which best suits their needs” – but he claims the health care law is a failure.
Guinta lists four data points as proof that the Affordable Care Act is not working: “[D]ue to Obamacare, premiums have increased by more than $4000, small business wages have decreased by $22.6 billion annually and the number of full-time workers will be reduced by 2.5 million all while costing taxpayers more than $2 trillion.”
We checked his numbers.
Claim: Premiums have increased by more than $4000
To back up his assertion that health care insurance premiums have increased by more than $4000, Guinta cites a 2012 news release from the Kaiser Family Foundation and the Health Research & Educational Trust presenting the results of their annual Employer Health Benefits Survey.
The release actually contradicts Guinta’s suggestion of runaway increases in the cost of health care coverage. “Premium growth is at historic lows, which greatly benefits workers,” noted Maulik Joshi, Dr.P.H., president of HRET and senior vice president for research at the American Hospital Association.
The survey reported annual premiums for employer-sponsored family health coverage increased by four percent in 2012. We could find no reference to a $4000 premium increase. Guinta does not provide detail or identify the baseline for his claim.
We consulted the current edition of the Employer Health Benefits Survey. In 2014, the annual premium increase for employer-sponsored family health coverage slowed to 3 percent, with an average premium of $16,834. According to the group’s previous surveys, the last year the annual premium was $4000 less than the current premium was 2008, two years before the Affordable Care Act was even enacted.
Claim: Annual small business wages have decreased by $22.6 billion
Guinta points to a CNBC account of a 2014 report by the American Action Forum to back up his claim that small business wages have decreased by $22.6 billion a year.
This report, from a right-leaning policy institute, has been frequently cited by House Republicans in their attempts to repeal the Affordable Care Act. Earlier this year, a reporter from the Arizona Republic analyzed the study and concluded the claim was “unsupported.”
“The report contends that following the law’s passage, small-business employees saw a slight decrease in wages correlated with an increase in employer contributions to health insurance,” the fact checker explained. “In contrast, before the health-care law passed, wages at companies of the same size increased as health-care premiums increased, according to the report.”
“The study … attempts to say workers would have earned more money had insurance premiums increased in the same way without the Affordable Care Act. This leads to a far higher number than simply looking at wages before and after the act’s passage,” the Arizona Republic concluded.
Claim: The number of full-time workers will be reduced by 2.5 million
Guinta cites a 2014 report by the Congressional Budget Office (CBO) to back up his claim that the Affordable Care Act will lead to a reduction of 2.5 million full-time workers.
The CBO report he cites estimates the Affordable Care Act will reduce the total number of hours worked by about 1.5 to 2.0 percent during the period from 2017 to 2024. This translates to a decline in the number of full-time-equivalent workers of about 2.5 million in 2024. The decline “will consist of some people not being employed at all and other people working fewer hours; however, CBO has not tried to quantify those two components of the overall effect,” the report notes.
The gist of Guinta’s claim is accurate though he overstates the numbers by conflating “full time workers” with “full-time-equivalent workers” and he fails to point out that the reduction is due to some workers voluntarily working less hours.
“The estimated reduction stems almost entirely from a net decline in the amount of labor that workers choose to supply, rather than from a net drop in businesses’ demand for labor,” the report states.
“CBO’s estimate that the ACA will reduce employment reflects some of the inherent trade-offs involved in designing such legislation. Subsidies that help lower income people purchase an expensive product like health insurance must be relatively large to encourage a significant proportion of eligible people to enroll,” the report explains. “If those subsidies are phased out with rising income in order to limit their total costs, the phaseout effectively raises people’s marginal tax rates, thus discouraging work.”
Claim: Obamacare will cost taxpayers more than $2 trillion
Guinta cites a Washington Examiner account of the CBO’s Budget and Economic Outlook report, released January 2015, which estimates the Affordable Care Act will cost $2 trillion dollars from 2015 to 2025.
That’s accurate, but Guinta (and the Examiner) fail to note that the estimate is 20 percent lower the original projection by the CBO when the health care law was signed. (Guinta also failed to note the cost will be partially offset by $643 billion in new revenues and penalty payments.)
CBO director Douglas W. Elmendorf told the New York Times that the reduction “resulted from many factors, including a general ‘slowdown in the growth of health care costs’ and lower projections of insurance premiums that are subsidized by the federal government.”
Adding it all up
Guinta is one of 77 Republican co-sponsors of legislation to repeal and replace the Affordable Care Act. The data points he offers as justification range from incomplete and misleading to outright false.
He suggests the health care law is producing runaway premium increases when, in fact, premium growth is at historic lows. He relies on a discredited report to claim the law will cause small business wages to significantly decline. He paints a picture of a massive boondoggle when, in fact, estimates of the program’s cost have dropped by 20 percent since the law was enacted.
Jonathan Chait points to four new studies that indicate the health care law has been successful at increasing access to the uninsured, reducing overall health-care costs, reducing hospital errors and increasing insurance competition. “Obamacare is actually working,” he writes. “Indeed, evidence continues to mount that the law is working extremely, even shockingly, well.”