Tag Archives: subtraction

No, 10 million have not gained coverage through the ACA

A blog entry by Josh Marshall on the Talking Points blog and largely repeated by Ezra Klein on the Washington Post WonkBlog contends that 9 or 10 million people have obtained coverage through the Affordable Care Act. This statistic, which I am frightened will be repeated by those predisposed to the Affordable Care Act until such time as it is deemed true, is just nonsense.  There is something called “causation” and just because A occurred and then B occurred does not mean that A caused B. There is also this arithmetic operation called “subtraction,” and while one can make a pile of numbers look bigger by neglecting to subtract off the ones that make the result smaller, such an omission corrupts the resulting sum.

Where does the 10 million figure come from?

The 9-10 million figure is comprised from 3.1 million people under the age of 26 who have coverage, 2.1 million people who have allegedly obtained coverage in the individual Exchanges, and 4.4 million who have allegedly obtained coverage through Medicaid expansion.  The graphic shows the computation. Each of the constituent numbers has serious problems.  And there are negative numbers that Marshall and Klein have neglected to take into account.

Marshall-Klein addition
Marshall-Klein addition

The 2.1 million counts people who have not paid for their policies

The 2.1 million figure has problems. It uses the “enrollment” number rather than the “paid for” number.  We don’t yet know the conversion rate between putting an item in one’s shopping cart — perhaps to preserve the right to obtain retroactive coverage — and actually paying for coverage.  Early conversion rates in some states, as discussed on this blog, have been less than two thirds. So, until we know how many people actually purchased policies, the 2.1 million represents an upper bound on coverage, not the actual number.

Mr. Marshall asserts, by the way, that it is “deep and intense form of denial” to say that people won’t pay for their policies.  All I can say is, “let’s see.”  I promise I will post on this blog a very unfun entry titled “I was wrong” if it is shown that at least 80% of the 2.1 million that have enrolled thus far actually get coverage in the Exchanges pursuant to the ACA.  Let’s see if Mr. Marshall is willing to make a similar promise if more than 20% don’t get coverage.

The 4.3 million Medicaid number counts people who would have obtained Medicaid without the ACA

As Klein though not Marshall acknowledges, the 4.4 million number is high because there would have been an expansion in the number of people in Medicaid even without the ACA provisions taking effect in 2014.  Moreover, as Klein has the honesty to concede, “some states are also counting people who’re simply renewing existing Medicaid policies.” So what’s the real number. Klein says he doesn’t know and I can’t say I do either. But, according to data from the Kaiser Family Foundation,  Medicaid enrollment increased by 3.4 million between 2008 and 2009, by 3.4 million between 2009 and 2010, by 2.4 million between 2010 and 2011 and by 1.3 million between 2011 and 2012.  Wouldn’t a fair minded person thus subtract  at least 1 million from the 4.4 million figure? Wouldn’t a fair minded person want to at least mention the issue?

By the way, I know that we are just counting people covered “because of” the ACA, but while we’re at it perhaps we should remember that more people are on Medicaid may not be this unalloyed wonderful thing. Many may be on Medicaid as a result of increased poverty or may be substituting Medicaid other health insurance coverage that they earlier had.

[Note: Following my publication of the original version of this blog entry, Sean Trende published on RealClearPolitics.com a far more detailed and, frankly, better analysis of this number that I have did here. He notes that much of the expansion in Medicaid numbers comes from states that did not in fact expand Medicaid.  His estimate is that the correct number of persons who received Medicaid coverage because of the Affordable Care Act is about 10% of the Marshall-Klein number, perhaps 380,000.]

The 3.1 million number counts people who already had coverage

The 3.1 million number apparently counts everyone under the age of 26 who has coverage under their parent’s policy. But what would the number be “but for” the Affordable Care Act? How many of the 3.1 million are insured “because of” the ACA. First, many insurers were already covering dependents up until age 25 or close thereto.  Two thirds of the states had laws required that they do so. Thank the states, not the ACA. Second, much of the effect is substitution.  Not all, but a good number of these young adults could have obtained coverage on their own through their job or otherwise but, because of the peculiar way many group policies obtained through an employer work, found it cheaper to enroll on their parents plan.  All the ACA does, then, with respect to these people is reallocate where people get their insurance and the costs different types of insurers face.  Actual scholarship conducted by the National Bureau of Economic Research found that found that early implementation of the ACA increased young adult dependent coverage by 5.3 percentage points and resulted in a 3.5 percentage point decline in their uninsured rate.  The National Bureau of Economic Research thus estimated the reduction in uninsured young adults caused by the ACA at least in 2010 at well less than one million.  Nothing to sneeze at, but not the 3.1 million claimed.

By the way, in case you mistrust the National Bureau of Economic Research, take a look at the work of the Employee Benefit Research Institute.  It too found that some young adults were substituting parental coverage for coverage they might have had to pay for through their jobs.  It too found that the ACA had increased the number of young adults with health insurance coverage, but not nearly to the same extent as the claim of 3.1 million made by these bloggers.

The ACA has also caused people to lose coverage

Marshall and Klein may be good at adding fake numbers, but they appear to have forgotten about subtraction (or how to add negative numbers).  There are a number of people who have lost health insurance coverage as a result of the ACA. There are likely to be a yet larger number who lose it when small business has to renew policies later in 2014 and finds those policies considerably more expensive. (I’ll be talking about this issue more in the next month or two). No one knows exactly how many people have lost coverage so far or how many will lose it in “the second wave.” Estimates of the first number range from half a million and up and I have estimated the second number as being many millions.  One would think an honest assessment of the effects of the ACA would not just ignore these negative consequences.  Even President Obama, by giving at least some of those people, a (possibly unlawful) exemption from the individual mandate has not gone that far.

And finally …

The Affordable Care Act can not be defended with the glib “it’s worth it if even just one person got health care coverage as a result.” There are a lot of ways to give people health care coverage and to improve people’s health. How that’s done can determine how much money it costs the government and what sort of a burden it places on individuals and businesses. That’s why it does in fact matter how many people are helped by the ACA and how they are helped.  That’s why it galls me that the grossly exaggerated 10 million figure is likely to get considerable play. If it were true, the figure would matter.  The problem is that it is neither true nor calculated in a way likely to get at the truth. So, when we assess the ACA, could we please stop the nonsense, add up real numbers, and remember about subtraction!

[Note: Following the publication of this blog entry, the Washington Post rated the assertion that 9 million people have gained coverage through the ACA a “Two Pinnochio lie.” It reserved the right to adjust (upwards, I presume) the number of Pinnochios, however, if it turns out that the 4 million Medicaid number isn’t right either.  I believe Sean Trende’s analysis (see above) makes pretty darned clear that the 4 million figure is a serious exaggeration.  I thus expect no fewer than “Three Pinnochios” being attached to the assertion by the time all is said and done.]

[Note: I just checked (February 5, 2014) and darned if the Washington Post didn’t upgrade the lie to Three Pinnochio status — “Significant factual error and/or obvious contradictions.”  See here and here. Good for the Washington Post!]

In fairness …

There are, actually, two things I like about the Marshall/Klein blog entries. The first is that Marshall points readers to the “Gaba spreadsheet.” This is one of several attempts to actually track enrollments under the Affordable Care Act.  It is a useful resource that, in conjunction with other data, should help people speak objectively about the ACA.  The second is their point that the decrease in the number of uninsured would be a lot higher if all states had agreed to expand Medicaid.  Yes, Medicaid would have cost a lot more for the federal government and, possibly, a bit more for the states, and, yes, there are ways other than provision of insurance to give people access to medical care or improve their health,  but the reduction in the number of the uninsured caused by the refusal to expand Medicaid is a point opponents of the ACA need to deal with.  I have this wish that people could stop treating the ACA as this monolith that is either all wonderful or all awful. Disentangling it may prove impossible and improving it may prove very difficult and/or very expensive, but, in the long run, misleading presentations of the facts do not help anyone’s health.

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