Sunday, December 8, 2013

Straight Shooting on the ACA

As I’ve noted in a previous post, when it comes to interpreting reports about how well the Affordable Care Act is doing, Sen. Fred Thomas is very good at being both selective and creative. This talent was on full display at a meeting of the Revenue and Transportation Interim Committee in Helena this week. During the discussion of some arcane tax issue, Thomas (no doubt aware of the TV camera in the room) engaged in the following exchange with the committee chairwoman, Sen. Christine Kaufmann:*

 Thomas: “The insurance premiums available on the new Affordable Care Act are significantly higher than what’s available in the market today…, so people are going from a lower costing health plan to a much higher one… We’ve done some analysis on these rates and these very significant rate increases…”

Kaufmann: “The new insurance rates are not significantly higher; in fact they are quite good rates for Montana consumers… I work daily with these insurance plans and rates and there are very good ones out there”.

Thomas (tapping on a paper): “We’ve got the study that indicates that’s not accurate ... I don’t agree with what you concluded.”

Kaufmann: “And I don’t agree with what you’ve concluded.”

Thomas (still tapping):
“Forty percent is a pretty big increase.”

Gosh! You mean we’re all going to be paying 40 percent more for health insurance?  But wait a second! Who is this “we” who’s got this study? What study is it? Can we read it for ourselves? What does it say?

Well, it turns out that it is a study by the Legislative Auditor, performed at Sen. Thomas’ request but on the taxpayers’ dime. Since it is a public document, we can have it and read it for ourselves.** And when we do we find that it doesn’t say at all what Thomas claims it does.

It is not a comparison between what people are paying today and what they will pay in the future.

It does not say that “people are going from a lower costing health plan to a much higher one.”

It does not say that there are going to be very significant rate increases or that rates are going up by 40 percent.

What it does do is compare the published prices of health insurance policies on the exchange with the anticipated prices of comparable policies bought off the exchange, and the very broad conclusion it reaches is that “premiums will generally be the same for plans on and off the exchange.”  It also notes that people whose income falls at or below 400 percent of the Federal poverty level***, and who buy insurance on the exchange, will get a tax credit which will lower the effective cost of the insurance, in many cases by quite a bit. And it creates four different “scenarios” comparing the anticipated prices of on-exchange and off-exchange insurance for four different families, in different circumstances, and eligible for different tax credits.

In three of these scenarios, the family is eligible for the tax credit and will be able to purchase insurance at substantially lower cost on the exchange than off. In one scenario, in which the family earns enough not to be eligible for the credit, buying on the exchange would cost about 40 percent more.  That’s apparently what Thomas calls a “40 percent increase.”  But it’s no such thing. It’s not how much more a family in that particular scenario will pay, compared to what they pay today. It’s how much more that family would pay in the future if, in a catastrophic failure of common sense and good judgment, they chose to purchase insurance on, rather than off, the exchange.

It’s pretty obvious that Thomas was using the opportunity of the committee hearing to try to scare people about the terrors of Obamacare!  And since the report he requested from the Legislative Auditor, read objectively and in its entirety, wasn’t at all scary, Thomas had to read it creatively and selectively to try to make it say what he hoped it would.

If Thomas wants to use the public’s money and a public forum to gun for the ACA, is it too much to ask that he at least shoot straight?

* Talk about being selective! That’s obviously what I am doing here, and I am leaving out the part of the discussion relating to taxes, so you might want to check out the audio minutes of the meeting. The conversation I am quoting starts at about 01:07:45, if you want to cut to the chase (and you should!).

** I don’t think this study is available on line yet, but you can request a copy from the Legislative Auditor’s office. Here’s the contact information.

*** For a family of four, 400 percent of the Federal poverty level is an income of $94,200.