How we make the call
Truth Squad assigns five ratings to the political statements we review, in descending levels of accuracy:
|Who:||Republican Governors Association|
|What:||“Who Stands To Lose,” 30-second TV ad|
|The call:||Regular Foul|
“The last time Mark Schauer held state office, Michigan was circling the drain. Then he left for Washington, where he voted for Obamacare. In fact, Schauer voted with Obama and Democrats 95 percent of the time. Now Michigan’s seniors are facing higher costs, fewer benefits and loss of their doctors. Thanks to Schauer and Obama, who stands to lose the most? Taxpayers. Seniors. Families. You.”
The 30-second ad by the Republican Governors Association opens a new line of attack against former U.S. Rep. Mark Schauer, who is running against incumbent GOP Michigan Gov. Rick Snyder. The RGA had already pumped nearly $3.2 million into TV ads on behalf of Snyder as of Sept. 1, according to the Michigan Campaign Finance Network. The ad reprises earlier charges linking Schauer to Michigan's recession. But this one also assails him for backing Obamacare, also known as the Affordable Care Act, which the ad asserts is harming coverage for senior citizens. It is an interesting strategy, given that Snyder pushed for approval of Medicaid expansion under the act. It has enrolled more than 400,000 low-income Michigan adults in its first year.
Statements under review:
“The last time Mark Schauer held state office, Michigan was circling the drain.”
Classic guilt by association. RGA backup material for the ad cites a litany of figures, including job losses and rising unemployment that happened while Schauer served in the state Senate from 2003 through 2008.
The numbers speak for themselves. In January 2003, non-farm private sector employment in Michigan stood at 4,445,700. In December 2008, it stood at 4,054,600 – a drop of more than 390,000. Michigan’s unemployment rate was 6.2 percent in January 2003. It was 10.6 percent in December 2008. But this fails – as did a previous RGA ad – to substantiate its suggestion that Schauer was responsible for a miserable decade. Most analysts attribute Michigan's losses in that decade to the decline of manufacturing, notably the near-collapse of the automobile industry. It is worth noting that Schauer served as minority leader in the state Senate and that Republicans controlled that body during both of his terms.
“Then he left for Washington, where he voted for Obamacare. In fact, Schauer voted with Obama and Democrats 95 percent of the time.”
Little to dispute here. Schauer voted in 2010 to pass Obamacare, issuing a statement at the time that “it's about doing what's right for the people of Michigan to get our economy back on track." According to the Washington Post, Schauer voted 95 percent with his party during his term in Congress from 2009 through 2011.
“Now Michigan’s seniors are facing higher costs, fewer benefits and loss of their doctors. Thanks to Schauer and Obama, who stands to lose the most? Taxpayers. Seniors. Families. You.”
This is a complex issue that requires some background. About 16 million Americans – one third of those in Medicare, the government health care program for those 65 and older – are enrolled in a private option to that program known as Medicare Advantage. It is paid for by federal funds but managed by private insurers and often offers lower premiums and options like vision care or gym memberships. At passage of the ACA in 2010, that option was costing about 14 percent more than traditional Medicare. The act aims to drive down its cost by reducing payments to insurers by about $156 billion over 10 years. The nonpartisan Congressional Budget Office estimated that overall Medicare spending would be reduced by $716 billion over 10 years under the act, because the law also cuts spending to hospitals, home health services, hospices and skilled nursing services. Backers said the reductions are needed to shore up the long-term financial security of Medicare, under increasing fiscal stress because of the rising numbers of aging Americans. Trustees cautioned in 2012 that the trust fund that pays hospital costs would run dry in 2024. Critics warned those cuts could compromise care and degrade the private Medicare private option.
AARP – the nation's largest senior citizen lobbying group – backed Obamacare. In a February briefing, an AARP official said the act’s provisions “strengthen Medicare and give more coverage,” noting that it closes the “donut hole” gap in prescription drug coverage by 2020. The briefing said it's too early to tell if the spending cuts will affect care.
Analysis in April by the Kaiser Family Foundation, a nonprofit health care research organization, found that premiums paid by members were relatively stable since 2012 at about $35 per month but that some insurers were increasing out-of-pocket spending limits. Because of cuts to insurers, the CBO projected the number of enrollees in Medicare Advantage would fall to 10 million by 2014. That market drop never materialized. The CBO now projects that Medicare Advantage enrollment will reach 22 million by 2020.
RGA documentation notes that health insurers such as UnitedHealth Group Inc., the largest provider of Medicare Advantage, expected to cut the number of doctors in its network by 10 to 15 percent by the end of 2014.
The ad expands its attack to the entirety of the ACA, as it flashes the words “Jobs lost.” RGA supporting material notes a CBO estimate that the act will result in the loss of 2.5 million jobs by 2024. A CBO statement issued in February said that figure is “almost entirely” due to workers voluntarily leaving jobs or cutting back hours. That's in part because subsidies under the ACA diminish as income rises, which the briefing notes means “a portion of the added income from working more would be offset by a loss of some or all of the subsidies, which represents an implicit tax on earnings.”
The Center for Healthcare Research & Transformation, a nonprofit partnership of the University of Michigan and Blue Cross Blue Shield of Michigan, projects that the ACA will cut the number of uninsured in Michigan in half by 2019.
|The call:||Regular Foul|
The first part of the ad reminds us that Michigan “was circling the drain” while Schauer was in office. But it doesn't tell us why he might be responsible. That said, it’s indisputably true that the Michigan economy was horrible during Schauer’s time in the state Senate.
The second part of the ad – focused on Medicare and the ACA – oversimplifies a complicated issue and tells but a part of the story. It fails to acknowledge the legitimate concerns over long-term financing of Medicare the act attempts to address. It also leaves out the fact that hundreds of thousands of Michigan residents now have health insurance because of the act. None of that warrants a foul; it’s just another case of a political ad not giving voters the full story which, as Truth Squad has repeatedly pointed out, no political ad is required to do.
The ad falls into trickier territory when it concludes that seniors and taxpayers are net losers under Obamacare. Yes, the governor’s group can cite examples where some seniors’ costs have risen, or their benefits or choice of doctors has narrowed.
But premiums under the private option have remained relatively stable the past few years. Further, the ACA closes the gap in Medicare’s prescription drug coverage to seniors by 2020. That means lower costs to seniors. Predictions that the ACA would cripple the private insurance option under Medicare have thus far been proven wrong. And long-term forecasts indicate that reforms to Medicare under the ACA are trimming its cost. That should be good for taxpayers.
As the Kaiser Foundation noted in an updated analysis on Monday, the latest Congressional Budget Office data show Medicare spending in 2014 is projected to be about $1,200 less per person than forecast at the time the ACA took effect. Those savings are expected to double by 2019, with the act’s efficiencies likely spurring providers to “tighten their belts,” producing savings that are “good news for Medicare, the federal budget and for beneficiaries.”
“It is clear that the Medicare savings provisions in the ACA, such as reductions in provider payment updates and Medicare Advantage payments, have played a major role, and the changes included in the law may be having a bigger effect than was expected soon after the law passed,” Kaiser wrote.
Truth Squad awards a foul for this claim.