Grading PolitiFact (Florida): Rick Scott and rising insurance premiums under ObamaCare

PolitiFact regularly engages in prodigious spin on behalf of the health care reform bill.  The following case featuring Gov. Rick Scott of Florida and PolitFact's state operation in Florida serves as just one example among many.

The issue:

(clipped from PolitiFact.com)

The fact checkers:

Katie Sanders:  writer, researcher
Angie Drobnic Holan:  editor


Analysis:

PolitiFact quotes Rick Scott:

"(W)e know the Congressional Budget Office said if you’re going to buy your own policy with these exchanges you’ll be paying 10 percent more, or a family will. So about $2,100 more for a family. So you’re going to pay more with these exchanges."

PolitiFact finds that Scott spoke accurately:

As Scott said, CBO expected the average premium per person in new individual policies would rise 10 percent to 13 percent in 2016 compared with where it was before the law took effect.

In this market, average premiums per policy in this market would be about $5,800 for single policies (a $300 increase) and $15,200 for families (a $2,100 increase -- just like Scott said), according to CBO (pages 5 and 6).

If only the report ended there.

The third paragraph hints at significant caveats, especially since we note from the graphic at the top of the story that Scott receives a "Mostly False" rating.  Before we move on, however, note that Scott used the conservative end of the CBO estimate to back his statement.  He used 10 percent instead of 13 percent.  Sometimes PolitiFact uses such factors to award extra credit.  Apparently not this time.

Now for some mighty PolitiFact spin.

PolitiFact explains that using an "apples to apples" comparison in the same CBO report leads to the CBO's conclusion that the provisions of the PPACA lead to a net savings of 7 to 10 percent on the average premium.  The "apples to apples" comparison shows that the exchange system does provide some features that reduce insurance premiums.  The CBO report estimates that for equivalent plans the exchange would save 7-10 percent compared to current law.  Of course the exchanges require much higher levels of insurance, than the current average, and this spikes the cost of premiums.

The CBO's estimate of  the ACA's effect on nongroup insurance premiums

The CBO's chart makes clear that the increase in premiums stems from increases in insurance coverage.  Curiously, PolitiFact calls this a benefit:

People will pay more, but it will be for a bigger swath of benefits. The law requires insurance companies to offer an "essential health benefits" package that would mirror benefits people get through employer plans.

People receive benefits from insurance when their insurance pays for something.  A healthy person who goes to the doctor once per year for 10 years regardless of insurance coverage is not receiving any additional benefit from insurance coverage.  The person is paying much more for the same benefits.

PolitiFact actually refers to coverage when it refers to benefits.  The expanded scope of health coverage primarily enables the government to expand the pool of people paying for insurance so that healthy people who do not have an immediate need of insurance will help pay the benefits of others--a much wider swath of benefits.  In short, overall medical costs go way up while the premium costs per individual go down.  This from a bill that was sold as a means of controlling rising medical costs.  It doesn't do much at all to control costs.  Instead, it coerces the people into paying for higher overall costs.  And the bill contains measures that shift  costs from those who present the biggest risk to those with thicker wallets.

Where does that leave us on this fact check?  PolitiFact charges Scott with leaving things out, and we'll address those charges individually.

Many (CBO estimates 57 percent) seeking nongroup insurance through state exchanges would receive subsidies.

Scott specifically referred to persons paying for their own insurance through the exchanges, which implicitly acknowledges subsidies.  The availability of subsidies through the exchanges should be common knowledge.  It's hard to see why PolitiFact should fault Scott for this omission, especially when the subsidies drive overall costs up instead of bringing them down.  Insurance subsidies represent progressive partial free riding.

Though the insured pay more, they receive a "bigger swath of benefits"

PolitiFact tries to make this seem like a huge benefit, but it's kind of like getting an expensive Buick when all you really need is a Kia.  There's no more Kia.  The Buick is the new entry-level automobile.  And maybe the Buick has leather upholstery, but then again maybe you're a vegan (celibates paying for contraception and pregnancy insurance).  Again,. there's no reason why Scott should need to provide this detail.  He's giving reasons why he's not setting up an exchange.  His objections have to do with overall cost and the priorities of Floridians.  When everyone's driving a Buick, people are paying more for transportation even if Buick drops its prices down to wholesale.

Exchanges do help lower costs in an "apples to apples" comparison

To the extent that Gov. Scott's statement suggests that exchanges do nothing to encourage cost reductions, PolitiFact has a point.  Buick dealers can compete against each other to provide the lowest-cost Buick and that competition does have an effect, not to mention economies of scale.  But Scott emphasizes overall health care costs, so he is justified in keeping the emphasis on the overall increase in premiums.

"People purchasing their own health insurance comprise less than one-fifth of the market"

People who are not purchasing their own health insurance are not purchasing it through an exchange, so this point is irrelevant.  There's no reason for Scott to mention it, since he's giving reasons for not setting up a state exchange.  In fact, the smaller the share of the market, arguably the greater justification Scott has for not setting up an exchange.

PolitiFact routinely asserts that Scott leaves out important information.  PolitiFact routinely leaves out the justification for calling the information important.  Scott's omissions were of borderline relevance at most.

PolitiFact:

Scott said that the Congressional Budget Office said people would pay 10 percent more for policies on the exchange, "so about $2,100 more for a family." What he doesn’t say is that these policies will have to offer comprehensive coverage. So people will pay more, but they’re also get more benefits. Additionally, the federal government will offer subsidies to many of these people to cut the cost.

It’s also important to remember the CBO’s "apples-to-apples" comparison. According to the agency, people in the individual market will actually pay less for the required amount of benefits under the Affordable Care Act than they would for those same benefits under old policies.

We rate Scott’s statement Mostly False.

Note that while Scott emphasized overall medical costs to the state of Florida and its people, PolitiFact's objections all center around costs to the individual.  PolitiFact ignored Scott's central point and graded him according to a standard that failed to respect the context of his remarks.

The "Truth-O-Meter" ruling, as is so often the case, represents an absurdity.  PolitiFact defines "Mostly False" as a statement that "contains an element of truth but ignores critical facts that would give a different impression."  But Scott's statement does not simply contain an element of truth.  His statement is perfectly accurate and even takes the lower premium increase estimate from the CBO report.  None of PolitiFact's caveats alter the impression that a family paying for its own insurance faces a 10 percent hike, unless it shows that the CBO said the hike might end up at 13 percent instead.

This case points up again that despite PolitiFact's continued assertions that "words matter" it makes a great big exception for itself when it comes to defining the "Truth-O-Meter" grades.

Scott's statements were more truthful than PolitiFact's, using the same measure.


The grades:

Katie Sanders:  F
Angie Drobnic Holan:  F

This story reads like a PPACA apologetic, not like a fact check.  The PolitiFact team substituted its own point for Gov. Scott's point and graded Scott according to the result.  That's a wrong approach for fact checking, as PolitiFact admits in its statement of principles:

Context matters -- We examine the claim in the full context, the comments made before and after it, the question that prompted it, and the point the person was trying to make.

PolitiFact may think it grand that everyone in the exchange gets a good deal on a Buick, but that doesn't undermine Scott's point that getting everyone a Buick imposes a heavy burden in terms of cost.

Buick.com