Grading PolitiFact: Mike Pence and the Ryan plan for Medicare

This review takes on PolitiFact's second attempt to rate Rep. Mike Pence (R-Ind.) for a statement on ABC's "This Week."  Those curious about PolitiFact's first attempt can find a few details here.

The issue:

On the full page at PolitiFact, a "Barely True" graphic occurs just below the clipped material

The fact checkers:

Angie Drobnic Holan:  writer, researcher
Martha Hamilton:  editor

Analysis:

It's worth touching on the correction notice that now heads the story:

Correction: This item was originally published at about noon on April 13, 2011, based on ABC's transcript of "This Week With Christiane Amanpour." Shortly afterward, Pence's press office notified us that the transcript text was wrong -- leaving out the words "kind of."  Listening to the exchange on video, we confirmed the error in our original ruling. As a result, we are republishing this item at about 6 p.m. on April 13 with the correct quote from Pence and have upgraded the ruling from False to Barely True.

Isn't it basic that a verbal statement should be verified audibly?  It is a fact-checking failure to rely on a flawed transcript.  At least the correction has PolitiFact shouldering slightly more responsibility than their earlier place-holding announcement (via FaceBook):  "removed Mike Pence item because he was misquoted in This Week transcript."  Taking Responsibility version: "removed Mike Pence item because we relied on a flawed transcript for the fact check item."  But that's water under the bridge.  On to the more immediate problem:

"House Republicans under Paul Ryan's leadership have offered a vision to put America back on a pathway toward a balanced budget," Pence said. "It deals with issues in entitlements. It reduces the national debt. For Americans 55 or older, we're not proposing a single change in Medicare... What we want to do for Americans under the age of 55 is make sure they can participate in the same kind of health plan that members of Congress do."

Pence’s final claim about Medicare drew a response from Rep. Chris Van Hollen, D-Md., who was also on the show.

"That is not accurate," Van Hollen said. "Members of Congress have what is called a fair-share deal. We do not bear the entire risk of increased costs. They are asking seniors to bear risks (that) they are not asking themselves."

In the first paragraph featuring the quotation from Pence we have the claim we see in the headline as well as the source of the paraphrase--the things PolitiFact has already communicated as "Barely True."  The shift to Van Hollen introduces a second claim that appears to occupy PolitiFact's subsequent focus during the fact check process.  The second claim:

Pence replied, "Members of Congress have the same premium support system, Chris knows that."

We decided to see who was right by fact-checking Pence’s statement that future Medicare beneficiaries will be able to "participate in the same kind of health plan that members of Congress do."

As is so often the case, PolitiFact takes its first step with the wrong foot.

Van Hollen claims Pence's statement is inaccurate.  And he also claims--apparently in justification of his initial claim--that Congress does not bear the entire cost of premium hikes.  Van Hollen's reply to Pence is a bit of a red herring.  There is a difference between an insurance plan and an insurance benefit as provided by an employer.  Van Hollen tries to contradict Pence by conflating the two.  PolitiFact plays it Van Hollen's way. But in reality we have two claims from Pence, first that the next Medicare generation will be able to purchase plans like those Congress chooses, and second that the payment system for those plans is like that of Congress.

Writer Angie Drobnic Holan spends a number of paragraphs accurately describing the basics of Ryan's plan and stays in fair territory with the initial comparison:

Now let’s look at how whether proposal looks like what members of Congress can buy.

• How the plan is like what members of Congress get. We contacted Pence’s office to ask about how the Ryan proposal is like what members of Congress get, and they pointed us to the fact that Medicare plans from private insurers will be required to comply with a benefits standard set by the U.S. Office of Personnel Management, as do plans that cover members of Congress.

We should also note that seniors would be able to compare different plans and select from different insurance options, as members of Congress do. The government would pay part of premiums, as it does for members of Congress.

The similarity makes Pence look correct, though Drobnic displays a Van Hollenish tendency to lump the method of payment in with the plan itself.  Then comes the foul:

• How the plan is not like what members of Congress get. First, the plans would be created specifically for Medicare beneficiaries on newly created Medicare health insurance exchanges. (Exchanges are virtual marketplaces where people can shop for insurance.)

Second, as Van Hollen pointed out, members of Congress are protected somewhat when health insurance companies raise their rates, through a formula he mentioned known as "Fair Share." Generally speaking, the government pays for 75 percent of the average of the health insurance plans it offers. If the overall plans increase in price, the government still pays 75 percent.

1)  PolitiFact's first point is irrelevant.  Creating something new does not automatically make it substantially dissimilar to the model. 

2)  The second point requires a supporting argument.  PolitiFact's supporting argument will not stand, as we shall see.

PolitiFact:

Federal support for premiums in Ryan’s plan, though, would not keep pace with medical inflation. Premium support instead would be pegged to the consumer price index, which historically lags health care costs.

This paragraph from PolitiFact is unusual coming from a journalist.  Why?  Because journalists tend not to make key statements of fact on their own.  They nearly always, by design, refer such statements to a trusted authority so that the reader doesn't have to place trust directly in the journalist.  Fortunately, PolitiFact provides lists of sources in company with each of its fact checks.

Time (blog by Kate Pickert):

The subsidies would increase at a rate indexed to inflation, which is growing much more slowly than health care costs.

 So Van Hollen is right!  But wait!

Fortune:

The 2012 budget replaces the voucher concept with "premium support payments" -- once again, modeled on the federal employees system -- that the government would pay directly to the insurance plan the enrollee chooses.

So Pence is right!  Or close, anyway.  But wait!

The Congressional Budget Office (see p. 8):

People who become eligible for Medicare in 2023 and subsequent years would receive a payment that was larger than $8,000 by an amount that reflected the increase in the consumer price index for all urban consumers (CPI-U) and the age of the enrollee. The premium support payments would increase in each year after initial eligibility by an amount that reflected both the increase in the CPI-U and the fact that enrollees in Medicare tend to be less healthy and require more costly health care as they age. (For example, projected net federal spending per capita for all people age 65 and older in traditional Medicare would be about $15,000 in 2022, CBO estimates, in comparison with about $8,000 for 65-year-olds.)

If the CBO is right then the others are wrong, but Pence is probably the closest.

How did Drobnic conclude that Time was correct?  Perhaps her fourth source, from the "Wonk Room" of the dependably liberal Think Progress swayed her to discount the CBO:

Ryan is constraining the rate of growth in Medicare by offering seniors a defined contribution, regardless of the rate of growth in health care costs. The federal government’s contribution in the FEHBP program, by contrast, reflects actual increases in premium levels. As the Office of Personnel Management describes it, the FEHBP formula “is known as the ‘Fair Share’ formula because it will maintain a consistent level of Government contributions, as a percentage of total program costs, regardless of which health plan enrollees elect.” The difference is that Ryan’s proposal provides seniors with a set amount of money that, in order to reach the kind of savings he’s advertising, would have to depreciates every successive year — even as health care costs increase.

Whatever the process, the story suffers for lack of an explanation.

Speaking of suffering, we have more rationalization from PolitiFact:

Our final point on how the plans differ may seem obvious to some, but we feel it’s important to mention: Members of Congress receive employer-based insurance. By definition, that means they receive a salary to help pay for their insurance. The base pay for members of Congress is currently $174,000.

Medicare beneficiaries, on the other hand, tend to make a lot less money, because most of them are retired. The median income for Medicare beneficiaries was $20,644 in 2010. And only 5 percent had incomes exceeding $82,695, according to an analysis by the Kaiser Family Foundation.

This is just silly.  Pence said the new Medicare generation could buy insurance like that available to Congress, not that the insurance would be purchased by the government in whole or in part.  Van Hollen's red herring is to Angie Drobnic Holan as flowers are to Ferdinand the bull.

Hoodwinked by Van Hollen and mysteriously concluding that Ryan's premium supports are "pegged to the consumer price index," Drobnic's conclusion is predictable:

We should emphasize that Ryan’s Medicare proposal is only a broad outline right now, and there are many unanswered questions about it. But what we do know about it strikes us as fundamentally different from the kind of employer-provided health insurance that members of Congress receive. At a minimum, the premium supports will not keep pace with the historic record of rapidly increasing health care costs. Additionally, seniors make significantly less income than members of Congress and will likely not have the same options to buy more expensive plans. And, finally, they will not (have) the same protection against rising costs that "Fair Share" provides members of Congress. We rate Pence’s statement Barely True.

The conclusion is based squarely on two parts red herring and one part dubious assumption about the nature of Ryan's premium supports.  Importantly, the issue of premium supports is only relevant with respect to Pence's claim that "Congress has the same premium support system"--not at all the claim blaring in the PolitiFact headline.


The grades:

Angie Drobnic Holan:  F
Martha Hamilton:  F

PolitiFact's readers deserve to know how and with what level of confidence PolitiFact determined that Ryan's premium support system is pegged to the consumer price index.  The burden of proof is on the person making the claim.  Or so I've heard.

Afters:

I had intended to contrast a pair of epigraphs at the beginning of this item, one consisting of PolitiFact's self-statement of nonpartisanship and the second consisting of PolitiFact's burden of proof criterion ("People who make factual claims are accountable for their words and should be able to provide evidence to back them up").  But I ran into a problem because I can no longer find a statement of PolitiFact's non-partisanship on pages such as "About PolitiFact" (with the exception of PolitiFact Texas).  If the line has been scrubbed perhaps we can score one for truth in advertising.


April 15, 2011:  Rewrote point #1 after it was mysteriously eaten by Blogger's dog.   RIP the lovingly crafted baseball analogy.