Thursday, June 14, 2012

FACT CHECK: Cong. Candidate Vernon Parker and Waivers In Affordable Care Act ("Obamacare") (TWITTER THIS)

Twitter has become a significant resource to learn how candidates (and office-holders, etc.) think.  Many use it similarly to ordinary, non-candidate Twitter-users (Twits?): riffing on the day's news or items they heard/read/saw elsewhere.  Often - either by choice or inadvertently - the complexities of issues get lost in the 140 character messages, and the Tweets are inaccurate or misleading.

Arizona's Politics has occasionally responded to some of these.  Congressional candidate Vernon Parker prompted one of those responses yesterday, and someone who Parker replied to prompted a follow-up today.  However, since it is hard to fact check in 140 characters, we are bringing the Tweets and the fact check to this format.  (Hopefully, in relatively brief form.)

Parker - who is among a bunch of Republicans running for that party's nomination in new CD9 -  riffed yesterday on "Obamacare" (Affordable Care Act).  His tweet echoes a popular topic among Obama opponents:

I asked him "Which waivers are you speaking of? The ones that allow employers to temporarily keep lower benefit cap on employees' bene's?" Parker did not answer, but he did respond to a Chicagoan who pointed out that it many of them "went to" (House Minority Leader Nancy) Pelosi's district.  That "law kid" later replied to me that Senate Majority Leader Harry Reid also got his entire state of Nevada waived.

It seems that there is a significant amount of confusion about the waivers are, and how they reflect on whether Obamacare is good or bad.  Here are the results of my research conducted on and off over the past 24 hours.

There are (at least) two different types of waivers permitted under the 2010 law.  They are to allow employers (and others) to ease into the requirements set out by the law.  The type that Parker apparently referred to is the type that temporarily permits companies which believed that their employees premiums would skyrocket IF they have to find a plan which has a higher annual limit on how much the insurance company has to pay out for essential benefits for an insured.  In other words, if your company's plan had a $250,000/yr limit on how much it would pay out for your hospitalization/treatment, and the company (or, its representative) could show that switching to a plan with a higher limit would result in a huge increase in the employees' premiums, then the government would grant a one-year waiver to keep the less-desirable* plan. 

When the Republicans first raised this waiver issue last year, after the first batch of one-year waivers were granted, they required that the Government Accountability Office ("GAO") do an audit of how and to whom these waivers were granted.  Besides having a very good explanation of these waivers, the audit found that the waivers were fairly granted or denied to those who had applied for them.  (There is a good table in the middle of the report.) 

Here is The Hill's report on the audit.  It notes that the applications were approved if they showed that premiums would go up by more than 10%, and that they denied applications that showed an increase of less than 6%.  (Presumably, when these waivers expire, the companies will have to find plans without the caps, and premiums might then jump;  however, proponents of the law would likely suggest that the jump will not be as severe because all insurance plans will have to remove the benefit caps.

Parker's Tweet does not seem to make sense in light of the GAO audit, because granting the waivers is not a knock on the law or its eventual objectives.  Even if you think that low caps on benefits are okay because it is a private marketplace, the waivers just show that Congress and HHS realized the need to gradually work towards eliminating the low caps.  That would seem to be responsible governance.

By the way, about the implication that there was some sort of funny stuff going on because a bunch of the waivers were from Pelosi's district, a article provided the simple explanation for that: a company that administers health plans for restaurants and other businesses had submitted waiver requests for a bunch of its clients.

The second type of waivers that Parker's supporter referred to - the one which Nevada (and several other states received - has to do with medical-loss ratios and the rebates that policyholders around the country are going to receive this summer.  Here - on the right side of the page, in a sidebar - is a very good explanation of the medical loss ratios that Obamacare aims to improve.  A health plan needs to spend 80% of its money on health-related expenses; if it spends too much on salaries, administration, etc., it must provide rebates to its customers.  Arizonans and Arizona employers will receive millions of dollars in rebates in August because Blue Cross Blue Shield of Arizona and several other large health insurers do not yet meet that ratio.

Nevada's Insurance Division requested a waiver because it did not believe that its insurers would be able to meet the 80% MLR and that would destabilize its market.  It is one of several states that asked for temporary waivers.  Nevadans - and residents in the several other states that requested and received waivers - will receive less money rebated than Arizonans insured by some of the very same companies, as shown in this table from the HHS division that is in charge of the program.  (That table also shows that 17 states plus Guam requested and received similar waivers, demonstrating that implications that Sen. Reid pulled a quick one are a bit too conspiracy-minded.)

Here are a couple of more interesting articles and sites that were used in the research for this article: article from 12/10 answering question: "Has the Obama administration allowed corporations to "opt out" of the new health care law?"
--Washington Post article from 3/11 : "Maine gets waiver from health premium rules"
 Bottom line is that Parker - like many - seems to not understand what these temporary waivers mean.  The common usage of the term gives people the impression that companies and states are sneaking out of the requirements of the law and that the law must therefore be too onerous.  And, that if it is too onerous, it must be bad. Add a dash of political conspiracy theory (which quite often has some basis in reality).  Spice it with inadequate explanations, and garnish it with today's political divisiveness, and you have a recipe for misleading and inaccurate information. 

It is one thing when private citizens put forward such informaton.  But, it becomes quite another thing when elected officials and candidates make such Tweets/comments without evidencing an understanding of the complexities of the issues.

* Everything else - including premiums - being equal, would you prefer a plan with a lower cap on benefits, or one with a higher (or, no) cap?

We welcome your comments about this post. Or, if you have something unrelated on your mind, please e-mail to info-at-arizonaspolitics-dot-com or call 602-799-7025. Thanks.

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