Because of Obamacare, "over the last two years, health care premiums have gone up -- it's true -- but they've gone up slower than any time in the last 50 years."
Barack Obama on Wednesday, October 3rd, 2012 in a debate in Denver
Obama said health premiums in the last two years went up slower than any time in the past five decades
Mitt Romney likes to say that if he’s elected, he will repeal President Barack Obama’s health care law "on day one." During the Oct. 3, 2012, presidential debate, he predicted what would happen if he isn’t elected: The Affordable Care Act would take full effect in 2014 and "health premiums go up by some $2,500 per family."
That prompted the following response from Obama:
"The fact of the matter is that, when Obamacare is fully implemented, we're going to be in a position to show that costs are going down. And over the last two years, health care premiums have gone up -- it's true -- but they've gone up slower than any time in the last 50 years. So we're already beginning to see progress. In the meantime, folks out there with insurance, you're already getting a rebate."
For this fact-check, we’re focusing on Obama’s claim that, "over the last two years, health care premiums have gone up -- it's true -- but they've gone up slower than any time in the last 50 years." We’ll also examine whether Obama was correct to suggest this slowing in premium growth is connected to reforms in his health care law.
Health care spending -- not premiums -- grew slower than at any time in 50 years
Obama’s statement about historically low growth is rooted in a real study. Economists from the Centers for Medicare and Medicaid Services published a report in January 2012 that said health care spending grew less in 2009 and 2010 than any time in 51 years. Preliminary estimates for 2011 show the same trend.
But Obama got himself into trouble by saying "premiums" instead of "total health care spending." It’s not his first time, either. We dealt with this linguistic confusion before when we evaluated Obama’s pledge to reduce health care premiums for the typical family by $2,500 -- a Promise Broken on the Obameter. Using Project Vote Smart, a database of public statements by politicians, we found evidence of Obama using the two terms interchangeably, which is a mistake.
Premiums, what people pay to buy health insurance coverage, are only one part of health care spending. Total health care spending includes out-of-pocket costs such as copays, coinsurance and deductibles; depending on the insurance plan, some medical services and physicians aren’t covered at all.
It’s worth noting that evidence exists to back up the part of Obama’s claim about premiums. A survey by the Kaiser Family Foundation, a nonpartisan health policy research group, found slowing growth in the cost of premiums.
Dr. Drew Altman, president and CEO of Kaiser, called annual growth in premiums -- along with total health care spending and per capita spending -- "strikingly low." The Kaiser survey, however, goes back 14 years, not 50.
Credit the recession, not Obamacare
We also wondered: Are premiums and total health spending growing at slower rates because of Obama’s health care law?
Obama characterized the slowing growth of premiums as "progress" and mentioned rebates -- a piece of the Affordable Care Act -- in the same breath.
We asked for an assessment from Dr. Bradley Herring, a health economist who teaches a course on the history of U.S. health reform at Johns Hopkins University’s Bloomberg School of Public Health.
"I don’t think it’s fair for one to attribute that slowed growth in healthcare spending to the ACA," Herring said. "Most health economists attribute much of the slowdown (in) the growth in healthcare spending to the recession."
Even the government study Obama used to make his claim gives credit to the economic downturn -- not the new health care law. It says the recession between 2007 and 2009 had a delayed effect on health care spending. When the economy goes south, high unemployment, losses in private health insurance coverage, drops in household income and companies’ reluctance to hire new employees result in less health care spending, according to the report.
The study noted that much of the Affordable Care Act isn’t in place yet, so its effect on recent health care spending has been minimal. For instance, the report estimated the law’s net impact on 2010 spending to be less than 1 percentage point.
"Most of the 2010 provisions, other than a few specific provisions affecting Medicare payments, had a negligible impact on total spending or shifted the distribution of spending without affecting the overall rate of growth," the report said.
Obama said health care premiums have gone up slower than any time in the last 50 years and suggested it was because of the Affordable Care Act.
He mistakenly referred to premiums, not all health care spending for 50 years. The historical data for premiums is generally consistent with his claim, but they only go back 14 years. He also vastly exaggerated the impact of his health care law on the costs. Experts say that's due to the recession, not the law.
We rate his claim False.
Published: Thursday, October 4th, 2012 at 4:11 p.m.
Interview with Bradley Herring, health economist at the Bloomberg School of Public Health at Johns Hopkins University, Oct. 4, 2012
Email interview with Kara Carscaden, spokeswoman for the Obama campaign, Oct. 4, 2012
ABC News, full transcript of the presidential debate from Denver, Colo., Oct. 4, 2012
Health Affairs, Growth In US Health Spending Remained Slow In 2010; Health Share Of Gross Domestic Product Was Unchanged From 2009, January 2012
Kaiser Family Foundation, Family Health Premiums Rise 4 Percent to Average $15,745 in 2012, National Benchmark Employer Survey Finds, Sept. 11, 2012
Kaiser Family Foundation, Reflections on this year's four percent premium increase, Sept. 11, 2012
PolitiFact, No cut in premiums for typical family, Aug. 31, 2012
Project Vote Smart, Democratic Presidential Candidates Debate - Transcript, Jan. 31, 2008
Project Vote Smart, Obama Statement on Report of the Trustees of Social Security and Medicare, March 27, 2008
We want to hear your suggestions and comments.
For tips or comments on our Obameter and our GOP-Pledge-O-Meter promise databases, please e-mail the Obameter. If you are commenting on a specific promise, please include the wording of the promise.For comments about our Truth-O-Meter or Flip-O-Meter items, please e-mail the Truth-O-Meter. We’re especially interested in seeing any chain e-mails you receive that you would like us to check out. If you send us a comment, we'll assume you don't mind us publishing it unless you tell us otherwise.
Keep up to date with Politifact:
- Sign up for our e-mail (about once a week)
- Put a free PolitiFact widget on your blog or Web page
- Subscribe to our RSS feeds on Truth-O-Meter items
- Subscribe to our RSS feeds on GOP Pledge-O-Meter items
- Subscribe to our RSS feeds on Obameter items
- Advertise on PolitiFact
- Shop the PolitiFact store for T-shirts, hats and other PolitiFact swag