Health care in Texas doesn’t have to be chaotic. We don’t have to make it harder to succeed, harder to hold a job, harder to stay well. Instead of having the highest numbers of uninsured children and adults in the nation, Texas could have the best health care system in America — especially if our governor sincerely is ready to work together to create meaningful coverage and affordable access for Texans. Our state leaders can protect the lives of Texas women and children by keeping mothers covered between pregnancies, preserve the right to cover children up to age 26, and provide options for the millions of people who would lose health coverage if the ACA actually goes away.
The rush to gather support for legislation can leave the truth behind. Speaker Paul Ryan claims that the MacArthur amendment to the American Health Care Act (AHCA) protects people with pre-existing conditions while lowering premiums. Let us look at each of Speaker Ryan’s “verified” claims one-by-one and explore why each claim is full of misdirection and misinformation.
Claim #1: The MacArthur amendment protects people with pre-existing conditions.
False. At first glance, the MacArthur amendment seems to retain the core provisions of the Affordable Care Act (ACA) that protect Americans with pre-existing conditions. It seems to prohibit insurance companies from charging higher premiums to individuals with pre-existing conditions, also known as community rating, and it seems to prohibit insurance companies from denying coverage to individuals with pre-existing conditions. Upon closer inspection, the MacArthur amendment simply punts the decision to cover pre-existing conditions to states, giving federal legislators political coverage, letting them wash their hands of any responsibility and insulating themselves from blame by allowing themselves an escape to say, “Your state chose to gut protections for pre-existing conditions. Don’t blame us.” However, it is fairly telling when Rep. Billy Long of Missouri and Rep. Fred Upton of Michigan, prominent Republicans who have previously led ACA repeal efforts, come out and say they cannot consciously support the AHCA because of how the MacArthur amendment undermines protections for those with pre-existing conditions.
Claim #2: It provides a strict process to receive a waiver from federal mandates.
False. According to the legislative text of the MacArthur amendment, states may simply “attest” that their waiver will reduce premiums, increase coverage and plan choice, or stabilize the marketplace. This will not be hard for states to claim since any reductions in benefits will result in lower premiums. The claim that this is a strict process is also confusing because the legislative text states that waivers would be automatically approved by Health and Human Services (unless they were disapproved for noncompliance within 60 days). Unlike the requirements for 1332 waiver applications, there is uncertainty as to whether states will even be required to provide evidence of what their waiver purportedly achieves.
Claim #3: It gives states flexibility in addressing health care premiums.
Not really. If flexibility equates to allowing states to strip away the Essential Health Benefits (EHBs) and community rating (as mentioned above) in order to decrease premiums, then yes, this amendment does exactly that. Allowing states to define their own version of EHBs undermines lifetime and annual limits and caps on out-of-pocket expenditures because these provisions only apply to EHBs. The changes to these provisions could potentially impact large group and self-insured employer plans as well. In addition, the MacArthur amendment also allows states to eliminate benefits that were often omitted prior the ACA, such as maternity coverage and mental health parity. Premiums may decrease because nothing is actually covered; but then why pay for non-insurance?
Claim #4: The MacArthur amendment will help lower premiums for Americans.
Half-true. The MacArthur amendment potentially drives down premiums because the health plans are less generous (meaning fewer covered services and benefits) and those who are sicker pay significantly more and placed into a high-risk pool. High-risk pools segregates high-cost individuals and historically charges premiums that are twice the amount a health person would pay and imposes waiting periods and annual limits. Even Wisconsin’s high-risk pool (the example that Speaker Ryan often uses) did not cover pre-existing conditions for the first six months! It would be more accurate for Speaker Ryan to say that under the MacArthur amendment, premiums will decrease for those who healthy and significantly increase costs for those who are sick.
Does it add up?
No. Just because Speaker Ryan places the word “verified” in front of his statement, does not mean that makes those statements truthful. Removing or weakening the EHBs means that certain conditions or services may not be covered, allowing insurance companies to essentially select which individuals they want to cover (hint: they don’t want the sick). Allowing insurance companies to remove community rating means that insurance companies can simply price you out of their coverage if you have a pre-existing condition since they cannot technically refuse you coverage. While not directly stating that protections for pre-existing conditions will be gutted, the MacArthur amendment effectively compromises these protections and puts affordable health care out of reach for millions of Americans with medical conditions that are of no fault of their own (despite what Rep. Mo Brooks of Alabama believes).
It has been said “There are three kinds of lies: lies, damned lies, and statistics.” In the ongoing barrage against evidence-based data and real reality, let’s see if we can bring some clarity to the conversation around the Health Insurance Marketplace, the exchange that allows consumers to pick health insurance plans and was founded by the Patient Protection and Affordable Care Act, commonly called the ACA and sometimes known as “Obamacare.”
We know that almost nine out of ten Texans can choose between ACA Marketplace health insurers, and nationally approximately eight of out every ten Americans have more than one choice. So we were puzzled by a recent quote from Paul Ryan (R-WI) stating that “customers in 70 percent of the U.S. counties have only one or two insurers.”
Why are Rep Ryan’s numbers wrong? This is an important question since as the Speaker of the U.S. House of Representatives, what Ryan believes about the ACA will inform how hard he tries to save it, or destroy it.
In his quote, Ryan cites the conservative Heritage Foundation report, which also states that 86 percent of Texas counties have only one or two insurers. But what does that really tell us? After all, approximately 60 percent of Texas counties have more cattle than people!
Simply put, using counties is misleading because counties are not equal. Not simply in Texas but nationally, there are big disparities in population density between rural and urban counties: 86 percent of the U.S. population live in 1,253 urban counties while only 14 percent of the U.S. population live in 1,889 rural counties.
A better metric to use when gauging ACA successes or failures is the availability of choice for consumers, not counties. Let’s look at the choices available for consumers. (Note: For clarity, we’re using conservative whole numbers, not fractions, which is why the sum of our Texas percentages equal 99 instead of 100.)
Nationally, in 2017, 57 percent of Marketplace enrollees will have a choice of three or more insurers, 22 percent will have a choice of two insurers, and 21 percent will only have one choice. In Texas, 12 percent of enrollees will have access to only one insurer, 29 percent of enrollees will have two insurers, and 58% of enrollees will have access to three or more insurers.
So why would the Heritage Report use counties rather than people? We can guess the reason why counties are used is because it exaggerates the downward spiral of the ACA, which matches an invented narrative of “Obamacare bad.”
Recent evidence tells us otherwise. A Brookings Institute study shows us that the Marketplace premium increases had little if any impact on enrollment. Despite claims of a “death spiral” and hysteria over predicted massive premium increases and fewer insurer participation, the Individual Marketplace for 2017 is stabilizing. There are corroborating reports predicting further stabilization of the market and maturing of the risk pool.
It is important to acknowledge that the lack of insurer participation is still a serious issue that must be addressed moving forward. Nationally, the percentage of Marketplace enrollees who have access to one or two insurers increased from 14 percent to 43 percent between 2016 and 2017. Because the GOP defunded parts of the ACA, some insurance plans couldn’t afford to stay in business, and others were penalized and lost their profits. That’s bad for consumers.
Thus, until the Republican party develops and implements a replacement for the ACA, efforts must be made to stabilize the Individual Marketplace for 2018 and beyond to prevent more insurers from existing. Several things can be done to bring stability and predictability. Some proposed policies have been to increase the penalties associated with the individual mandate, narrow the special enrollment periods and grace periods for missed payments, and reestablish the reinsurance program.
Moving forward, increasing insurer participation must be a priority. It is imperative to stabilize the Individual Marketplace and create an environment that incentivizes participation from insurers, at least until Republicans develop a plan. Any delay or passivity will harm the millions of Americans who depend on plans from the Marketplace for coverage.
Did you know a bipartisan national bill is the source of tax changes in recent years? Yes: Republicans and Democrats voted together for the changes. But you might believe something different, since inaccurate statements about tax provisions in the Affordable Care Act (ACA) have been floating around the internet for years. These zombie emails and posts linking taxes directly to the ACA keep coming back despite attempts to set the record straight.
Many of the tax rates mentioned in the email (see below) were passed under the American Taxpayer Relief Act of 2012 (ATRA), enacted on Jan. 1, 2013, not the Affordable Care Act. ATRA was a bipartisan response to expiring tax cuts which, importantly, allowed the U.S. to avoid a “fiscal cliff” crisis.
Have you been misinformed? Check this out and decide for yourself!
Here is the full text of the zombie post:
Here is what happened, quietly, on January 1, 2015:
Medicare tax went from 1.45% to 2.35%
Top Income tax bracket went from 35% to 39.6%
Top Income payroll tax went from 37.4% to 52.2%
Capital Gains tax went from 15% to 28%
Dividends tax went from 15% to 39.6%
Estate tax went from 0% to 55%
A 3.5% Real Estate transaction tax was added.
Remember these facts:
These taxes were all passed solely with Democrat votes.
Not a single Republican voted for these new taxes.
These taxes were all passed under the Affordable Care Act, aka Obamacare.
If you think that it is important that everyone in the U.S. should know this.
There are many millions who don’t yet, then pass it on.
Truth or Myth?
Here are detailed examinations of these claims, including links to the underlying data:
Statement #1: “Medicare tax went from 1.45% to 2.35%”
Clarification: No, the overall Medicare tax did not rise as described. On Jan. 1, 2013 (not 2015) a minority of Americans saw a partial tax increase of 0.9% via the ACA — applicable to single filers who earn more than $200,000, or married couples who file jointly and earn more than $250,000.
Statement #2: “Top income tax bracket went from 35% to 39.6%”
Clarification: ATRA, not ACA. Passed under the bipartisan ATRA, the top income tax rate was increased from 35% to 39.6%. What’s false is the claim that this was part of “Obamacare” and that it went into effect on Jan. 1, 2015. Again, this bipartisan ATRA provision only applies to a small percentage of Americans — single filers who earn more than $415,050 and married couples filing jointly who earn more than $466,950.
Statement #3: “Top income payroll tax went from 37.4% to 52.2%”
Clarification: Nope! First, this is not a technically defined item in tax or other laws. Second, it looks like someone mixed up income and payroll taxes, but these are two separate things. Third, the Tax Foundation estimated in 2015 that if you were to combine income taxes and payroll taxes to describe a “tax burden,” they add up to a total tax burden of 31.5%. Fourth, while there are other methods used to try to calculate “burden,” any way you add it up, no combination of income taxes and payroll taxes reaches 52.2%: that number seems wholly invented.
Statement #4: “Capital gains tax went from 15% to 28%”
Clarification: Nope, bipartisan ATRA, not ACA, and the numbers are wrong. Passed under ATRA, the capital gains tax for the highest earners increased from 15% to 20%. This only applies to long-term capital gains and impacts tax payers in the top bracket. Most Americans face a 0% or 15% capital gains tax rate. There is a 28% capital gains rate for two categories: small-business stock and collectibles.
Statement #5: “Dividend tax went from 15% to 39.6%”
Clarification: Again: No, ATRA, and the numbers are wrong. Passed under ATRA, the dividend tax rate increased from 15% to 20%. Similar to the capital gains tax, this tax rate also only applies to tax payers in the top bracket. Those not in the top tax bracket will pay either 0% or 15%.
Statement #6: “Estate tax went from 0% to 55%”
Clarification: Again: No, ATRA, and the numbers are wrong. The estate tax briefly and narrowly paused at 0%, but only for the estates of those who died in 2010. The top estate tax rate went back to 35% in 2011 and 2012. Under bipartisan ATRA, the tax rate was increased to 40% for those who died in 2013 and thereafter. The tax rate has an exemption amount of $5.45 million per person, meaning: if you make less than that amount, you do not owe any estate tax.
Statement #7: “A 3.5% Real Estate transaction tax was added”
Clarification: A net investment income tax has been distorted to create an untruth. Variations of this statement claiming a 3.5% or 3.8% real estate tax on all real estate transactions have been floating around the internet. This claim is a misinterpretation and incorrect reference to a 3.8% tax on net investment income. Considering the nuances involved in the law, only a small percentage of Americans would ever pay this tax and certainly not on all real estate transactions.
Statement #8: “These taxes were all passed solely with Democrat votes. Not a single Republican voted for these new taxes”
Clarification: Nope, this is false. Most of the tax changes referenced here were passed under ATRA. ATRA had bipartisan support in both chambers — 40 Republicans in the Senate and 85 Republicans in the House voted for the bill, in addition to Democratic Senators and Representatives.
Statement #9: “If you think that it is important that everyone in the U.S. should know this…then pass it on.”
Clarification: Yes, we believe truth matters. We do believe people should know the truth about the emails they receive and the underlying data and facts (or myths!). Most recent tax changes were enacted by the bipartisan ATRA, not the ACA. Please feel free to share this post setting the record straight about taxes, ATRA and the ACA with everyone you know.
Wondering whether to chill out (or freak out) this summer over proposed health insurance premium rate increases? Here are resources that provide insights into ACA Marketplace rates in Texas.
This PDF is a snapshot showing current coverage categories for Texans. For example, how many Texans have Employer-Sponsored Insurance and how many have Marketplace, Medicaid, or have no coverage: Texas ACA Rates Analysis with Research
These documents show various plans and rates for certain categories of County, State and Federal employees living in Texas:
While these resources are helpful generally, they are most useful when referenced in the context of Ken Janda’s Houston Chronicle Gray Matters article about proposed Marketplace price increases.
This article from the Los Angeles Times helps explain the Affordable Care Act’s “risk corridors,” which were intended to help stabilize the early years of the Marketplace, and which were de-funded by GOP leaders in the US Congress.
Additionally, you may be interested in this national analysis from the Kaiser Family Foundation of 2017 premium changes and insurer participation in the Affordable Care Act’s Health Insurance Marketplaces.
New health center sites in Texas will share more than $5 million in Affordable Care Act funding from U.S. Health & Human Services. The funds to eight community and healthcare organizations across the state are expected to serve nearly 30,000 new patients, said HHS Secretary Sylvia M. Burwell.
The Texas funds are part of $101 million in Affordable Care Act funding by HHS to 164 new health center sites in 33 states and two U.S. Territories for primary healthcare services in communities that need them most and are projected to increase healthcare services for nearly 650,000 patients.
“The Affordable Care Act has led to unprecedented increases in access to health insurance. Part of building on that progress is connecting people to the care they need,” said Secretary Burwell. “Health centers are keystones of the communities they serve. Today’s awards will enable more individuals and families to have access to the affordable, quality healthcare that health centers provide. That includes the preventive and primary care services that will keep them healthy.”
To see the state-by-state breakdown of the grants, visit HHS here.
Welcome to the 60 Minute Challenge for understanding how to solve Texas’ health coverage issues, reducing the percentage of uninsured Texans from 24% to under 10%. [Read more…]
The Houston Chronicle reports that as of Dec. 19, there were about 6.4 million first time signups in the Health Insurance Marketplace nationwide. This is great news, however, Texas still has the highest uninsured rate, and Houston, specifically, has more than one million uninsured residents. I’m encouraged a rise in the number of people signing up for coverage, but we still need to find a way to ensure coverage for all.
Read the full Houston Chronicle story, here.