"Health care premiums up 90 percent in New Hampshire."
Americans for Prosperity on Wednesday, April 23rd, 2014 in an ad
AFP says health care premiums up 90 percent in New Hampshire
A new ad by the free-market group Americans For Prosperity takes a swipe at Sen. Jeanne Shaheen, D-N.H., for her support of President Barack Obama’s health care law.
The ad, released in April, proclaims, "Health care premiums up 90 percent in New Hampshire."
New Hampshire residents may have heard this claim before. Earlier this month, the New Hampshire GOP said in a press release that "health care premiums are ‘skyrocketing’ and have increased 90 percent in New Hampshire because of ObamaCare." The release went on to say that "ObamaCare is an unmitigated disaster that is raising the cost of health care for the middle class."
A 90 percent increase seemed like a lot, so we decided to check the numbers.
The claim stems from a blog post at Forbes.com, which was based on a study by the investment firm Morgan Stanley.
The Morgan Stanley study takes a look at "individual and small-group rate increases." Respectively, those categories of health insurance refer to plans purchased by individuals on their own, and by smaller companies. A third category of private insurance -- large-group plans -- were not included in the study, even though those typically represent the most commonly held form of insurance.
So, the first thing to note is that while the study only looked at a subset of all health care premiums, the ad’s claim doesn’t make that distinction.
Another issue: Individual plans, and to a lesser extent small-group plans, have long been expected to produce larger premium increases than large-group plans. This is because existing individual- and small-group policies were less likely to include all of the requirements enacted under Obama’s law, such as free preventive care. To make up for those shortfalls in benefits, these plans were expected to raise premiums.
In fact, while the Morgan Stanley study pegged individual plan increases at 90 percent in New Hampshire, it said that small group plans increased by 15 percent. In other words, the ad cherry-picked the bigger increase statistic and ignored the other.
Then there’s the methodology of the study itself. Morgan Stanley surveyed 148 insurance brokers nationally, with only one being from New Hampshire, as reported by Factcheck.org.
That’s too small a sample to produce a reliable statistic, experts say.
Using just one respondent is like "calling one person up on the phone and asking their opinion," Robert Santos, chief methodologist at the Urban Institute told FactCheck.org.
The survey also reported a 100 percent increase in Delaware’s health care premiums, where only one broker was surveyed.
In fact, the statistic caught the eye of officials at the New Hampshire Department of Insurance, who asked to see the Morgan Stanley survey. They were told "it was proprietary and confidential," according to department spokeswoman Danielle Barrick.
"We don’t understand how Morgan Stanley is able to generalize what’s going on in the New Hampshire market based on talking to 158 brokers nationally," Barrick said.
We reached out to Americans for Prosperity New Hampshire, who stood by the claim.
"Forbes has not updated, corrected or retracted its original story," AFP-NH state director Greg Moore said. " Accordingly, one must assume that the news outlet is standing by its work."
Unfortunately, hard data on any premium increases since people were allowed to sign up for the Affordable Care Act does not exist, the insurance department said.
However, the Morgan Stanley study, if it were reliable, would suggest premium increases far beyond projections in an earlier study by the state insurance department. That study said the Affordable Care Act would increase premiums on the individual market by about 30 percent.
And costs would actually fall, not rise, once federal subsidies are taken into consideration. Income-based subsidies are available to consumers who purchased health care through the marketplace created under the Affordable Care Act. After subsidies, the study projected, individual premiums would decrease by 9 percent. Premiums, however, were projected to go up by a "significant" amount for people without subsidies.
By the end of February, 22,000 Granite Staters had purchased a plan through the marketplace. The department said that 83 percent of consumers with marketplace plans have been eligible for financial assistance.
As for "small group" plans, their increases were expected to range between 1 percent and 3 percent.
Finally, we asked the Department of Insurance whether they thought it was possible for an individual in New Hampshire to experience a 90 percent rise in their own premiums. Barrick said it’s hard to know for sure, since premiums vary based on age, tobacco use and the number of people covered under a certain policy.
The department said it’s possible for a resident -- especially someone older, who smokes and earns too much to get a federal subsidy -- to move from an employer-sponsored policy with a low employee-contribution rate to a policy in the individual market and find themselves "paying much more."
"However," Barrick added, "the fact that the person is paying more does not mean premiums went up in the aggregate" for all New Hampshire residents, as the ad says.
Americans for Prosperity said that health care premiums are "up 90 percent in New Hampshire."
The claim cited a Morgan Stanley report that based its New Hampshire numbers on data from just one insurance broker in the state. Experts say that’s far too small a sample to say anything definitive about what’s happening to premiums in the state.
It’s possible for some individuals, given the wrong combination of income and health factors, could see premium increases of 90 percent. But that’s a far cry from saying that such increases are typical in the state.
This statement is not accurate. We rate it False.