Fact check: Trump’s hit-and-miss ‘Obamacare’ tweet

Ricardo Alonso-Zaldivar
Associated Press

Washington — Taking a swipe at “Obamacare” on Twitter, President-elect Donald Trump correctly identified two of its most pressing problems — a spike in premiums and high deductibles. But he failed to acknowledge the subsidies that soften the hit for many consumers, though not all.

Trump’s series of tweets Wednesday came as President Barack Obama and Vice President-elect Mike Pence went to Capitol Hill to rally lawmakers on opposite sides of the political aisle for the coming battle over the fate of the 2010 Affordable Care Act.

“Dems own the failed ObamaCare disaster with its poor coverage and massive premium increases,” Trump tweeted.

“Like the 116 (percent) hike in Arizona,” he continued. “Also, deductibles are so high that it is practically useless.”

“It will fall of its own weight,” he predicted.

Trump is right on premiums in Arizona. They’re zooming up by an average of 116 percent as of Jan. 1 for people who buy plans on the HealthCare.gov marketplace. Many residents will see much higher increases, especially in rural Arizona. Yuma and La Paz counties are experiencing the biggest increases in the country.

Nationally, premiums are going up by an average of 25 percent for a mid-level benchmark “silver” plan. That’s considerably less than in Arizona, but far from ideal.

What Trump failed to mention is that the majority of consumers covered by Obama’s signature law receive federal subsidies to help pay their premiums. Those subsidies are designed to rise with the cost of insurance, and taxpayers absorb the hit.

A recent study by the Center for Health and Economy found that nationally the average monthly subsidy will increase by $76, or 26 percent, from $291 currently to $367 in 2017. Overall, about 85 percent of marketplace consumers receive premium subsidies.

But some customers make too much to qualify for assistance, which diminishes rapidly for those solidly in the middle class. And several million consumers buy individual plans outside of HealthCare.gov and state-run insurance markets, and they don’t receive subsidies either. Trump’s observation is spot on for those paying full freight.

Insurers say the price spike is due to lower-than-projected enrollment, sicker-than-expected customers, problems with a government-designed system to stabilize premiums, and some patients gaming the system by signing up when they need expensive treatment and then dropping out. The Obama administration says it’s a one-time “market correction” because insurers initially set prices too low.

There’s a similar omission in Trump’s comments about deductibles. A deductible is the amount of actual medical costs that patients must pay each year before their insurance kicks in. The average deductible for a silver plan this year is about $3,700, according to the consulting firm Avalere Health. That’s significantly higher than what people in employer plans face.

But nearly 6 out of 10 marketplace customers receive another kind of income-based subsidy to help with deductibles and copays. For people with incomes just above the poverty line, those “cost-sharing” subsidies can knock the annual deductible down to about $300, according to the Kaiser Family Foundation.

Trump’s tweets, however, are on target for millions of consumers who don’t get the subsidy for out-of-pocket costs.

Curiously, Trump could face a decision on these very same cost-sharing subsidies after taking office. The Republican-led House has filed suit challenging the constitutionality of government payments to reimburse insurers providing the subsidies. If as president, Trump were to agree with the House, billions of dollars in payments would stop.

Insurers say that would put “Obamacare” into a free fall.