Grading PolitiFact: Sarah Palin and the cost of health care

Is Robert Gibbs still giving press briefings? It seems as though the media are obsessed with fact-checking conservatives these days. PolitiFact has reeled off a string of entries featuring Glenn Beck, Rush Limbaugh and Sarah Palin. The last time PolitiFact graded a major Democrat was Barack Obama with his shocking claim that employment numbers tend to lag as an economy improves. And that was over a week ago. Sarah Palin posted some commentary on her FaceBook page, though ...



The issue:



"Palin says health care reform will be costly." What an odd way to paraphrase what she said. If the latter is supposed to be the meaning of her claim then we can stop right now. It's true. But on the actual page the big Truth-O-Meter graphic just below "reform" says "Barely True."


The fact checkers:

Angie Drobnic Holan: writer, researcher
Bill Adair: editor


Analysis:

Drobnic goes immediately astray in her analysis:

Her note, titled "Pelosi 'Health Plan' Should Be DOA," argued that people shouldn't be compelled by the government to purchase health insurance. She also wrote that the House Democrats' measures for enforcing the new requirement, known as the individual mandate, are overly punitive.

Though Palin wrote that "Some provisions sound so outrageous as to be considered impossible to fathom," she also wrote that the harsh punishments were necessary for health care reform in the mode favored in the House bill. That comes out as Drobnic continues with a quotation of Palin:

"If you don't buy what the government considers 'acceptable health care coverage,' you’re going to be hit with a tax of at least 2.5% of your income," Palin wrote. "And if you don’t pay that new tax, you could be fined as much as $250,000 and sentenced to up to five years in prison.

"But here’s the thing: they have to make the penalty for opting out very harsh in order to force us to buy coverage. The only way to keep this government run health care plan afloat is for everyone to buy into it – especially young and healthy people. That means that they will have to penalize citizens if we choose not to buy a plan that will cost a minimum of about $15,000 per family per year."

Drobnic provides a fair amount of context. I like that.

Palin is correct that the Democratic plan requires everyone to buy insurance or face a tax penalty. The fines and jail terms, though, are not part of the health care bill, but rather the tools the Internal Revenue Service uses against tax cheats. (We ruled on a similar statement about jail terms and fines for those who don't buy health insurance and rated it Barely True.)

Here, we wanted to check out whether the plan requires people to buy plans that cost $15,000 per family per year.

The second paragraph reasonably paraphrases Palin. Drobnic may have to fudge on it if she is to rule Palin as less than "Mostly True." She uses the next two paragraphs to explain certain aspects of the bill before returning to the fact-check issue she identified. That's where we pick up:

The $15,000 number that Palin cites comes from a report from the nonpartisan Congressional Budget Office, a respected, independent federal office that calculates costs associated with pending legislation. The CBO found that in 2016, when the reforms are fully implemented, the annual cost of a basic family policy on the health care exchange will be $15,000.

So when Palin says people will have to buy policies that "will cost a minimum of about $15,000 per family per year," that applies only to people who buy insurance on their own.

So it seems that Palin remains gold through this point. People who buy insurance on their own are people, after all ("we wanted to check out whether the plan requires people to buy plans that cost $15,000 per family per year").

Only three paragraphs left. Fudge time?

For comparison, the average family policy in 2009 for someone who gets insurance through work is $13,375, according to an analysis from the independent Kaiser Family Foundation. The employer typically pays $9,860 of the policy, while the worker pays the remaining $3,515.

Drobnic is correct. And the policy costs $13,375 regardless of how the burden is shared.

She goes on:

People on the exchange will have to pay for the policies on their own, unless they qualify for tax credits to help them buy coverage. The tax credits are on a sliding scale; the House bill says that people who make up to 400 percent of the federal poverty level will qualify for credits. This year, 400 percent of the federal poverty level means $88,200 for a family of four and $43,320 for a single person.

I was under the impression that not all private individual insurance would be through the exchange under the House bill. My impression may be mistaken, of course. Regardless, we have to go to the next paragraph to have any idea as to what effect this is supposed to have on Palin's accuracy:

Palin said that under the House health care bill, the government "will have to penalize citizens if we choose not to buy a plan that will cost a minimum of about $15,000 per family per year." She's correct that they will be penalized if they don't have insurance. But her statement is misleading in two ways. For many who have health insurance through work, they won't have to pay $15,000 for the family plan because their employer will pay a lot of that. (The average employer would pay about three-fourths, if the current ratio continues.) For people of modest means, the government will give them a tax credit, so it won't cost them the full $15,000, either. The people who will have to pay the full amount will be people who have access to no other insurance and make more than 400 percent of the poverty level. Palin's statement implies that everyone will be forced to buy a family plan that costs them $15,000. In fact, only a small percentage of people would be forced to pay that full amount.

Misleading in two ways, eh? Let's look at those one at a time.

1) Palin misleads because many people will not have to pay the full amount because the employer pays for part. Also, many exchange participants will be eligible for tax credits and will thus not pay the full cost.

As I pointed out above, regardless of how the burden is borne the cost of the policy does not change. Drobnic also misses out on a critical observation regarding employer contributions. Steven Bryson, a commenter at PolitiFact's FaceBook page put it nicely:

(Y)ou pay the $15,000 either way. If your employer pays 3/4 of it, they aren't paying you the difference in salary as someone does if they don't provide a company health plan.

Bryson is correct. The costs of employing someone include all benefits such as health insurance contributions and the match of the employee contribution to Social Security. Our system hides that economic fact from the average person, and Drobnic does nothing here to uncover that particular truth.

Moreover, Palin did not write that all or even most people purchasing individual insurance would have to pay the full amount (PolitiFact: "we wanted to check out whether the plan requires people to buy plans that cost $15,000 per family per year"). The reasonable person understands that, so Palin should not feel the need to mention it.

Not much of an objection, upon examination.

2) "Palin's statement implies that everyone will be forced to buy a family plan that costs them $15,000. In fact, only a small percentage of people would be forced to pay that full amount."

Perhaps I haven't numbered the objections as Drobnic had them in mind, but that will not alter the end result.

There are two ways something can be "implied," and the line between the two is a bit fuzzy. One involves a form of logical consequence, as with the use of an "s" at the end of a word implying plural. The other sense is looser, even encompassing what we call "inference."

These fuzzy areas present the greatest challenge to the objectivity of fact-checkers.

Palin's statement does not logically imply that all families would pay the full $15,000. It is possible to draw that inference, however, so I cannot reasonably claim that this point is flatly false. It does contain a germ of truth. "Families" without a modifier can mean anything from two of them to all of them.

How do we cut down on the fuzz? We use context. Did Palin, in context, write anything that emphasized that families would personally feel the full $15,000 cost?

One thing might qualify:

The bill that came out of the Senate last month – the Baucus Bill – does just the opposite. It calls for a much lighter penalty ($750 maximum) for people who don’t buy government approved health coverage, making it cheaper to pay the fine than to pay for the coverage. (And with a recession on, who can blame families for not wanting to pay $15,000 for a government mandated health care plan?)

Just one problem: $750 is so much cheaper than $15,000 that the penalty would be cheaper for the vast majority (if not everyone) under the Baucus bill.

Overall, Palin's note does very little to encourage the notion that all families would pay the full amount. The absence of an explicit explanation provides the greatest strength to that inference. PolitiFact probably would let this one pass if an "artful" person had made the statement.

PolitiFact ultimately gave Palin a "Barely True" rating. It should have been no less than "Half True." PolitiFact has given out "Mostly True" ratings for worse statements than Palin's.


The grades:

Angie Drobnic Holan: F
Bill Adair: F

I almost awarded each a D- for at least rating Palin above "False." But this PolitiFact story is supposedly fact checking and is labeled as fact checking. The failure to note that employer contributions are in a real sense coming out of the employee's pocket represents a serious error. Claiming that Palin "implied" that all families would be faced with a $15,000 expense out of pocket is no less misleading, for it invites readers to suppose that the stricter sense of the term applies, particularly since the looser sense provides little excuse to fault Palin.

Palin is certainly correct that health care reform will be costly.