Keeping It Real: Fact-Checking Trump and Clinton on Obamacare

By Markets

Over 60 million Americans tuned into the second presidential debate last Sunday, and during that debate Donald Trump and Hillary Clinton squared off against one another on healthcare. The two candidates exchanged barbs that left many Americans wondering whether Obamacare is a rip-off or a rip-roaring success. Read on to see what the candidates said and find out whether what they said is true or false.

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Image source: Matt A.J. via Flickr.

Claim No. 1:

"Healthcare is going up by numbers that are astronomical: 68 percent, 59 percent, 71 percent." -- Donald Trump.

According to Kaiser Family Foundation the average cost of the second lowest priced silver metal plan, also known as the benchmark plan that is used to set subsidies, will see its price increase 9% next year. That's significantly higher than the 2% increase for these plans this year, but it's south of the figures provided by Trump.

Instead of averages, Trump's assertion likely focuses on premium increases for specific plans offered in specific areas of the country. For example, Kaiser Family Foundation reports that the average price of the second-lowest cost silver plan in Nashville, Tennessee will increase 25% in 2017. Ostensibly, some plans in that area are increasing their premiums by much more than that.

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Overall, Trump's correct that some plans are seeing premiums increase by double digit rates, however, other plans are seeing smaller increases and the price of the average plan is increasing less.

It is also important to remember that subsidies provided to Obamacare enrollees are adjusted for premiums, so not everyone participating on the Obamacare exchanges will feel the full brunt of insurer's increases.

Claim No. 2:

"Right now we are at 90% health insurance coverage... 20 million got insurance who didn't have it before." -- Hillary Clinton

Clinton's correct that the Affordable Care Act has significantly reduced the number of Americans without insurance.

Medicaid enrollment has grown by 15 million people since the Obamacare's launch allowed states to expand eligibility, and roughly 10 million people are paying for health insurance purchased via the state and federal Obamacare marketplaces.

Prior to Obamacare's launch, roughly 18% of Americans were uninsured, according to Gallup, and today, less than 10% remain uninsured, according to the Centers for Disease Control and Census data, the uninsured rate is 8.6%.

Overall, the Congressional Budget Office estimates that 27 million Americans remain uninsured, and getting them insured won't be easy. Despite rising penalties for going without health insurance, roughly a third of the uninsured are Americans who are younger than 34 and less likely to see the value in spending money on health insurance.

Image source: via Flickr.

Claim No. 3:

"Obamacare... It's going to be one of the biggest line items very shortly." -- Donald Trump

Obamacare is a costly national program, and because subsidies increase alongside premiums, spending is going to increase over time.

According to the CBO, spending by the federal government on a variety of federal programs and tax preferences will total more than $600 billion this year.

The CBO expects federal spending on Obamacare will grow at an annualized rate of 5.4% to $1.1 trillion in 2016. As a result, this spending will increase from 3.6% of U.S. Gross Domestic Product to 4.1% in a decade.

Claim No. 4:

"She wants to go to single payer." -- Donald Trump

It's not likely that Clinton will propose a single-payer system for America if she wins the election next month. During the primary, she said Bernie Sanders' Medicare-For-All proposal "will never, ever come to pass."

That being said, Clinton has said she would like to expand Medicare access to people in their 50s and she's indicated that Medicare could play an important role as an option for communities that are underserved by private insurers in the Obamacare exchanges.

Overall, Clinton appears to favor an expansion of Medicare eligibility, rather than replacing private insurance altogether.

Claim No. 5:

"And if you haven't noticed the Canadians, when they need a big operation, when something happens, they come into the United States." -- Donald Trump

It's true that 52,000 Canadians crossed the border into America for care in 2014, according to the Frasier institute. However, most of that travel was associated with non-life threatening procedures.

Meanwhile, the CDC reports that 750,000 Americans left the U.S. last year for healthcare in other countries, including India, Mexico, and Thailand. Typically, Americans traveled abroad to save money. According to The National Center for Policy Analysis, some procedures can cost 80% less in other countries than they do in the U.S.

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Claim No. 6:

"You can be on that policy until the age of 26, something that didn't happen before."-- Hillary Clinton

It's true that Obamacare expanded this rule nationally, but prior to Obamacare's implementation, more than 30 states had already put laws in place allowing some adult children to remain on parents' health insurance plans, according researchers at the Mount Sinai School of Medicine in New York. In some cases, eligibility was stricter and in other instances.

Laws within those states varied significantly regarding eligibility. For example, in Delaware children had to be unmarried and 24 or younger to be insured by their parents while in Florida, unmarried Americans without dependents could remain on their parents' plans until age 30.

Claim No. 7:

"Obamacare is a disaster.... In '17, implodes by itself." -- Donald Trump

There's little evidence of Obamacare imploding upon itself next year, but it is worrisome that insurers are exiting the marketplaces and that those exits are reducing access to plans in some areas of the country.

For example, UnitedHealth Group is citing hundreds of millions of dollars in losses on Obamacare plans as reason to reduce its participation significantly next year. A study by Kaiser Family Foundation in April determined that if UnitedHealth exited Obamacare entirely, then it would leave Americans living in 53% of U.S. counties with only one or two exchange insurers to choose from. Kaiser also said that such a decision would leave roughly 11% of Obamacare enrollees with only one insurer participating.

Since the ability for insurers to profit from Obamacare is important to ensuring competitive premiums, Americans should continue to pay close attention to insurers decisions to enter and exit participation in the marketplaces.

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