Grading PolitiFact: Nancy Pelosi exempts ObamaCare from basic economics

“Even if you disagree, our articles will make you smarter.”
--attributed to PolitiFact editor Bill Adair by the Nashua Telegraph

The issue:

(clipped from PolitiFact.com)

The fact checkers:

Jon Greenberg:  writer, researcher
Angie Drobnic Holan:  editor

Analysis:

Why review PolitiFact's grading of Nancy Pelosi's truth-challenged statement when PolitiFact gives it a "False" rating and I don't think any "Pants on Fire" rating is fair?  It has to do with the epigraph above and a very recent PolitiFact Florida fact check of Gov. Rick Scott.

In short, PolitiFact misinforms.

First let's hit the transcript from "Meet The Press" (MSNBC, bold emphasis added):

DAVID GREGORY: Well, Republicans have said they won't waste any time to try to repeal this.  Is that fantasy from your point of view?

NANCY PELOSI: It's being the mouthpiece of the health insurance industry.  And we're saying let's not have them be in charge anymore.  Let the people be in charge of how they receive coverage and health care.  It's -- they'll bring it up, and when they bring it up they will ask for repeal, repeal of all the things I said that help children, help young adults, help seniors, help men or women who may have prostate cancer, breast cancer, whatever it is, any precondition.  And everybody will have lower rates, better quality care and better access.  So that's what they want to repeal, we're happy to have that debate.

Note to scouts:  Pelosi has trouble handling a softball down the center of the strike zone.

PolitiFact:

That last line is a bold statement, because "everybody" covers a lot of people. PolitiFact has looked at Republican allegations that the law is bad because it will drive up premiums for most people and found those statements False.

PolitiFact apparently neglected to publish its findings on those supposed Republican allegations.  Except maybe one.

But back to Pelosi and PolitiFact:

Pelosi’s statement allows us to make an assessment of the opposite point -- the law is good because everyone will save money.

Woohoo.

PolitiFact:

The Congressional Budget Office is designed to be the neutral analytic arm of Congress, and its study on how the ACA will affect insurance premiums is widely seen as the gold standard when it comes to projections. We called Pelosi’s office for background on her claim, and they pointed us to a CBO analysis of the law.

Pelosi’s staff highlighted part of the report that states that for people who buy insurance on their own -- the individual market as it’s called -- rates will be 7 to 10 percent lower. Rates for those in the "small group" market will be 1 to 4 percent lower; and there will be little appreciable change for those in the "large group" market.

PolitiFact points out that the explanation from Pelosi's office misinterprets the report.  An average decrease doesn't necessarily indicate that all share the savings. PolitiFact then explains a separate  problem inaccurately (bold emphasis added):

Second, the CBO did this section of its analysis assuming that people would buy the same kind of insurance they do today, without the new law. So if they have a $5,000 deductible and limited coverage today, the CBO analysts compared that to the rate they would pay in 2016 to get that same coverage under the law.

Because the ACA changes minimum standards for insurance plans in exchanges, the report calculates according to what people would pay today if they had the type of coverage the CBO expects them to purchase in 2016.  Some of today's insurance plans won't qualify for an exchange offering, so it makes no sense to calculate according to plans that will not exist on the exchange.

PolitiFact immediately follows up with another flawed explanation (bold emphasis added):

(I)n its study, the CBO number crunchers actually predict that a large number of people will want to buy better insurance. They would opt for a lower deductible, lower co-pays and a wider range of benefits. That personal choice would cause their total premiums to rise some 27 to 30 percent. For a policy covering just one person, the difference would be about $600 a year, before accounting for any of the subsidies the law provides; over half the people in the individual market would qualify for those subsidies.

The above explanation is contrary to the one offered in the CBO report (bold emphasis added):

The main elements of the legislation that would affect the amount of coverage purchased are the requirement that all new policies in the nongroup and small group markets cover at least a minimum specified set of benefits; the requirement that such policies have a certain minimum actuarial value; and the design of the federal subsidies, which would encourage many enrollees in the exchanges to join plans with an actuarial value above the required minimum.

While PolitiFact sells the resulting higher premiums entirely as a personal choice, the CBO explains them as two parts requirement and one part personal choice.   The personal choice, as it happens, reflects the opportunity to use other people's money (the subsidy) to obtain a better relative value on one's own expense.  A New York Times blog explains it well:

The premium subsidies will be based on the price of the second-lowest-cost silver plan in a geographic area. If you sign up for that particular silver plan, you will pay no more than 9.5 percent of your income in premiums. But if you decide you want lower cost-sharing and want to spring for a pricier gold or platinum plan, you will be responsible for paying the difference between that silver plan premium and those of the more expensive plans, pushing your share of the premium over that 9.5 percent cap, said Jennifer Tolbert, a health policy expert at the Kaiser Family Foundation.

Going with a more expensive plan may make sense, depending on your health, family medical history or other factors. “If they’re paying 20 percent of their income now for insurance, it may be worth it to pay 11 or 12 percent for a more generous plan on the exchange, because they’d get much better coverage,” Ms. Tolbert said.

And of course somebody has to pay for the subsidy in any case.

PolitiFact quoted Heritage Foundation's Ed Haislmaier regarding the tendency of subsidy recipients to upgrade their level of insurance but probably provided insufficient context for readers to properly understand what he was saying.

PolitiFact had Pelosi dead to rights on her trifecta of falsehood but ignored everything for the sake of the fact check except her claim about lower rates.  And then PolitiFact botched the reporting on that issue, making the ACA look better than it is.

Smarter.  Right.


The grades:

Jon Greenberg:  F
Angie Drobnic Holan:  F

Afters:

Pelosi completely misrepresents CBO data and gets a "False" rating from PolitiFact.  Rick Scott accurately represents CBO data and gets a "Mostly False" rating because he supposedly left out a huge amount of critical context.

The ratings make perfect sense in a liberally biased kind of way.