Fact-checking a town hall healthcare reform meeting

David Gulliver - posted 12:45 pm Monday, Sept. 14; fixed three typos and added subhead, 4:45 pm Monday.

A town hall meeting on healthcare reform packed the Van Wezel Performing Arts Hall on Sept. 11 in downtown Sarasota, led by Rep. Vern Buchanan, R-Sarasota, and with sizable and vocal groups on both sides of the issue.

Buchanan staff selected a dozen people to speak at random, using audience members to draw ticket stubs from large cardboard boxes. Then they passed a microphone to several other attendees who asked to speak.

Of the first dozen speakers, three asked Buchanan to investigate the liberal non-profit advocacy group ACORN, citing recent reports on Fox News and the Glenn Beck show -- an issue, but not related to healthcare reform. Another asked Buchanan to lead the crowd in the Pledge of Allegiance. One read a poem widely circulated on the internet about our failure to appreciate what matters, and another read for more than five minutes from a Libertarian-themed speech. Other speakers lamented what they saw as the country's slide into socialism.

But a few speakers touched on relevant issues, as did Buchanan, both on stage and in a column that his staff handed out the attendees. What follows is a review of the statements of fact in the column and in speakers' comments.

From Rep. Buchanan's column, in order of appearance:

Health care now consumes 16 percent of the national economic output.
Close, but it’s even worse. That 16 percent figure dates from 2004. It is about 19 percent now. Healthcare spending is about $2.8 trillion, according to the Dept. of Health and Human Services. GDP is about $14.4 trillion, according to the Bureau of Economic Analysis.

And as renowned economists have pointed out, the more we have to spend on health care, the less we can spend on our homes, cars, the children’s college educations and so on. That percentage has steadily grown for decades and shows no signs of stopping. That’s what is driving the health care reform movement.

Reform as currently proposed would put health care decisions in the hands of Washington bureaucrats.
This comes into play in two ways. First is the proposal called the “public option,” akin to a Medicare-for-all plan. Most Washington observers expect it to be scrapped, with key lawmaker Sen. Olympia Snowe (R-Maine) suggesting that on Sunday.

If it did somehow survive, President Obama has described it as an option for Americans who could not find private insurance, perhaps 5 percent of the population. Critics fear it prove so successful it would steal customers from private plans and drive them out of business.

For the sake of argument, overlook the apparent contradiction that a government plan that denied care to its members would steal customers from private plans they like. In theory, the plan’s administrators would be government employees. They would have the same say over the plan as insurance company executives do over their plans, including which medical expenses are covered.

However, Medicare and Medicaid are subject to scrutiny from government agencies and commissions, as well as Congress. Congressmen, often at the request of constituents, can and frequently do demand answers from Medicare, either directly via their staff members, in hearings, and through performance and financial audits by the Government Accountability Office. Citizens can demand information via the Freedom of Information Act.

Insurance company employees see some oversight from state agencies, who generally only look at financial stability and truth-in-marketing issues, not medical decisions. And the Freedom of Information Act does not apply to private companies.

The second way the “government bureaucrats” argument could come into play is via proposed health insurance protections, like preventing insurers from considering pre-existing conditions, and structure of the national health insurance marketplace. Both efforts are supported by many Republicans as well as Democrats.

It’s impractical to parse H.R. 3200, the leading healthcare reform bill, because it almost certainly will be drastically overhauled before it goes to a vote.

But as it stands, insurance plans and the marketplace would fall under the jurisdiction of a new agency, the Health Choice Administration. That agency’s commissioner (and staff, presumably) would have authority to review private insurers’ plans. Those not participating in the marketplace would have to meet yet-undefined minimum benefit and coverage standards. Those wanting to participate would have to meet additional standards.

The criteria would be developed by a 27-member committee to be headed by the surgeon general and appointed in part by the president and by the comptroller general. The bill says the committee membership must give equal weight to all parts of the healthcare system.

In theory, the agency commissioner, the advisory commission or both could reject popular benefits and insurance plans. They also could mandate broader coverage and inclusion of more benefits.

H.R. 3200 calls for a government-run insurance plan.
One of the provisions of H.R. 3200 is a public health insurance option to supplement private insurance companies’ options. It states the plan would have to meet all the standards that apply to private plans. But more analysis is probably pointless, as noted above.

H.R. 3200 would increase the deficit...
Opponents of healthcare reform legislation usually point to the analyses by the non-partisan Congressional Budget Office. That agency estimates the reform plan on the table would increase deficits a total of $239 billion over 10 years from 2010 to 2019, or $24 billion a year, on average.

Paraphrasing Sen. Everett M. Dirksen, a billion here, a billion there, and sooner or later you’re talking about real money. That said, for context, the federal deficit for 2008 alone was $455 billion. So one year of the healthcare reform plan would boost that by about 5 percent.

... and threatens to kill jobs by taxing small businesses.
As a way to get more businesses to provide healthcare for their workers, the bill includes what has been called a “pay-or-play” provision. Those that don’t provide insurance would pay a tax to subsidize their workers’ coverage through other plans.

The CBO analysis said it would apply to firms with an annual employee payroll of $250,000 or more. The tax would start phasing in at 2 percent, so the smallest firm would pay $5,000 a year. Firms with payrolls of $400,000 or more would pay an 8 percent tax, or at least $32,000.

So how many businesses would be affected? President Obama said that all but 5 percent of firms would be exempted because of size or profit margin. It was unclear if he was referring to H.R. 3200 or another plan.

The Census Bureau found higher numbers. As reported in U.S. News & World Report, about 1.37 million small businesses -- one-quarter of all firms -- had payrolls of $250,000 or more.

But as U.S. News noted, the Senate healthcare reform bill uses a different standard, where a tax would kick in on businesses with 25 employees or more. Just 8.5 percent of businesses were that big, the Census Bureau said. And Senate bills usually win out in conference committee.

In addition, an amendment passed by one of the committees reviewing the bill would provide hardship exemptions for businesses that would lose jobs as a result of the requirement.

Either way, at least 75 percent of businesses are exempt. For the rest: Would $5,000 a year lead a business to lay off employees, or freeze hiring? What about $32,000? There is no definitive answer.

An independent study by the Lewin Group found that 88 million americans could be transitioned out of their current plan and into a new government-run plan.

Buchanan quoted the study correctly, but left out that Lewin Group is owned by Ingenix, a subsidiary of UnitedHealth, one of the country’s largest insurers. UnitedHealth operates Medicare Advantage plans, targeted for cuts in H.R. 3200 and in talks by the president and his staff.

The New York State attorney general and the American Medical Association accused Ingenix of providing slanted data that helped insurers shift charges back to patients. UnitedHealth eventually agreed to $400 million in settlements with the two parties.

In a July 23 story in the Washington Post, a Lewin Group vice president said his firm had editorial independence from UnitedHealth and had produced a report supportive of a single-payer plan, something insurance companies uniformly oppose. But the Lewin official also said that its clients sometimes buried studies that produced findings they didn’t like.

On Lewin’s web page is a quote from the Wall Street Journal and attributed to Sen. Ron Wyden, D-Oregon, and Bob Bennett, R-Utah, calling Lewin the “gold standard of independent health-care analysis.”

Meanwhile, the Congressional Budget Office -- the source Buchanan and many opponents cite on the reform plan’s budget deficits, disagrees strongly on the plan’s effect on private insurers. It estimates that no more than 12 million people would enroll in the public option plan, and that private insurers’ clients would actually grow -- again, probably a moot point.

Retirees will also suffer from $500 billion in proposed cuts to Medicare over 10 years.
This statement is half-correct: The plan does call for cuts to Medicare, actually about $538 billion, according to the Kaiser Family Foundation’s analysis of the bill and of the Congressional Budget Office’s workup.

But about one-third of that is in cuts to Medicare Advantage, the privatized version of Medicare offered through private insurers. About 22 percent of Medicare-eligible people use the plans. The program was created in the belief that private insurers could offer improved benefits at a lower cost than the government.

That, too, has proved half-correct. The plans generally offer more benefits, and with a lower out-of-pocket cost to seniors. But the reason is that the government heavily subsidizes the plans, and the various classes of Advantage plans cost 12 to 18 percent more than traditional Medicare, averaging 14 percent more expensive than Medicare. That helped Medicare Advantage plans turn a $3.3 billion profit in 2006, according to the Government Accountability Office.

More importantly, the statement about $500 billion in cuts ignores that the bill calls for Medicare spending another $320 billion over the 10 years in other areas-- almost three-quarters of it for doctors, who have long protested the complex and flawed formula under which Medicare pays them.

About $6 billion of that is set up as a bonus for doctors who practice family medicine, pediatrics, geriatrics or general internal medicine -- the foundation of improved preventative care, which could save money in the long run.

Then there’s the big-picture context. In 2008, Medicare spent about $455 billion to cover 46 million Americans. Given that Medicare spending will grow over time, $500 billion in cuts -- which actually are reductions to anticipated growth, not cuts to the current level of spending -- are less than 10 percent of each year’s spending.

The proposed $156 billion cut to the Medicare Advantage program would force millions of seniors to go back to more expensive traditional Medicare.
The Medicare Advantage reductions actually would come closer to $172 billion, Kaiser found. That said, how many people would it potentially affect, and how it would it affect them?

As noted, about 22 percent of those eligible use the Advantage plans -- far fewer in Sarasota County, where Sarasota Memorial Hospital has declined to accept the plans -- meaning three out of four seniors would be unaffected if insurers dropped the plans.

Would they? In 1997, with an earlier version of Medicare Advantage, Congress held budget increases to less than the rate of health cost inflation. Insurers pulled out of many areas around the country and about 250,000 plan participants had to find a new plan or got back to Medicare. This time, experts say, plans would be more likely to cut some of the benefits under their plans before they pull back completely.

83 percent of people with healthcare think their healthcare is pretty good.
This appears to come from a Fox News poll conducted July 21-22 by Opinion Dynamics, a polling firm. The poll appeared to question Democrats and Republicans in comparable numbers and had a sufficient sample size for a +/- 3 percent margin of error for a national survey.

Toward the end of a survey, which focused on approval of various politicians and impressions of health care reform efforts, the pollsters asked if the person had health insurance. They found 91 percent had insurance.

For those that said they had insurance, they asked “how would you rate the quality of your current health insurance” and “how would you rate the quality of your current health care.”

They report that 84 percent rated their health insurance excellent or good, and 83 percent said their health care was excellent or good. Republicans were much more likely -- about 20 percentage points -- to say their insurance or care was excellent. The poll did not ask if they used private insurance, Medicare, Medicaid or another option.

A search of Pollster.com, a polling aggregator website, turned up no comparable surveys. Perhaps the closest question was in a CNN poll in late August, where 45 percent of respondents said health care needed a “great deal” of reform and 46 percent said “some” reform was needed. And a review of recent polling, posted today on fivethirtyeight.com, notes that the president’s speech to Congress appears to have increased support for healthcare reform.

From speakers, in order of appearance:

There is no healthcare crisis, and the number of uninsured could be anywhere from 5 million to 47 million.
This came from the meeting’s second speaker, who identified himself as Richard Olson, a Manatee County resident. (spelling uncertain).

First, examining the quantifiable number. The estimate of 47 million uninsured comes from the Census Bureau’s Current Population Survey. The Bureau notes that the number could be flawed, and probably reflects the number of people who were uninsured at some point during the year.

The Bureau points to a study by the Bush-era Congressional Budget Office, from 2003. That study in turn cites three other surveys that it believes accurately get at the uninsured question. Citing those studies, the CBO says 21 million to 31 million people likely are uninsured for an entire year -- just two-thirds of the Census number, but significant nonetheless.

And one of those cited surveys finds that 10.7 percent of the population -- 27.9 million people -- were uninsured for at least two years between 2003 and 2006. It also found that 7.1 percent of the population -- 18.5 million people -- were uninsured for the entire four-year period.

The 5 million figure appears to come from former Republican governor and presidential candidate Mike Huckabee, who said in August that the Census figure is inflated with 12 to 13 million illegal immigrants and 29 million people who simply don’t want to spend their money on health insurance. Former White House advisor Karl Rove repeated the claim this month.

So what number of uninsured, if any, constitutes a crisis? That appears to depend on the observer.

President Obama is lying about how healthcare reform will handle illegal immigrants.

This was in a question from a man who identified himself as Stuart Jolly (spelling uncertain), who asked Rep. Buchanan to give a yes or no answer on whether he agreed with Rep. Joe Wilson, who shouted “You lie!” at the president when he said healthcare reform would not insure illegal immigrants. (Buchanan dodged the question.)

For this, check the St. Petersburg Times’ Pulitzer Prize-winning Politifact feature, which has investigated the Wilson claim and come up with a finding of “False.”

In response to the question, Buchanan said the House bill contained a “few sentences” on preventing illegal immigrants from getting subsidized insurance, but no real details. Politifact agrees.

A public option plan would devastate private insurers.
This was Rep. Buchanan speaking in response to a question from Sarasota County Democratic Party chairwoman Rita Ferrandino. She asked, essentially, whether there was a need for healthcare to be a for-profit venture. (She replied to an email asking for clarification shortly after this was published; will update with her response after we talk.)

Buchanan said that he believed she was referring to the public option plan, and that said plan would lead to a single-payor system and “there wouldn’t be any profit to be had.”

The Congressional Budget Office appears to disagree. As noted previously, it expects private insurers’ customers to increase, for a net gain of 3 million members by 2016. And that’s with a public option in place, which, again, is unlikely.

Could a public option lead to a single-payor, government run system that could run private insurers out of business as Buchanan said? That’s impossible to know, but for it to happen, the government-run plan would have to work better than private insurance, or receive massive government subsidies, something that would face a certain challenge from the insurance lobby.