Factcheck: Obamacare and the State of the Union

Obama's misleading description of his health plan
President Barack Obama, accompanied by House Minority Leader Nancy Pelosi of Calif. / AP

President Barack Obama, accompanied by House Minority Leader Nancy Pelosi of Calif. / AP


President Barack Obama spoke glowingly of Obamacare during his State of the Union address to Congress. However, on closer examination, many of the president’s statements on the Affordable Care Act turn out to be misleading and lacking context. Here are five of the president’s most important points on health care, along with explanations of the greater context.

1. “More than 9 million Americans have signed up for private health insurance or Medicaid coverage—9 million.”

We do not actually know how many people have signed up for Medicaid, the insurance program for the poor, because of Obamacare, as two writers at the Washington Post have noted. Some of the new Medicaid enrollees were eligible before Obamacare expanded eligibility, and some states are even counting the people who are signing back up for Medicaid.

Additionally, the number of people who have signed up for Medicaid is more than double the number of people who have signed up through the exchanges. The Congressional Budget Office was predicting that more people would gain coverage this year through the exchanges than through Medicaid.

These numbers also do not tell us what kind of people have signed up for insurance through the exchanges. If the pool of people is disproportionately unhealthy, then premiums could spike considerably next year and make Obamacare’s structure untenable.

2. “We did all this while adding years to Medicare’s finances, keeping Medicare premiums flat, and lowering prescription costs for millions of seniors.”

One way that Obamacare changed Medicare is by artificially reducing the rate at which Medicare payments are increasing. This change might save the government some money, but Medicare already pays well below what private insurance companies pay. The cap only further squeezes doctors and hospitals who are serving Medicare patients.

Additionally, it is unclear how much Obamacare is actually causing Medicare rates to stay flat, as the formula used to determine Medicare premiums was set long before Obamacare passed in 2010.

President Obama’s statement also ignores the fact that his signature domestic achievement does not reform the major driver of our rising healthcare costs: Medicare’s fee-for-service payment structure. The law simply tinkers around the edges of this program while ignoring the major structural problem.

3. “Now, a pre-existing condition used to mean that someone like Amanda Shelley, a physician assistant and single mom from Arizona, couldn’t get health insurance.”

President Obama’s statement makes Shelley’s situation seem more broadly applicable than it really is. It is true that before Obamacare, pre-existing conditions could effectively lock individuals out of the insurance market, since insurance companies would charge significantly more to cover these people. Both conservatives and liberals agree that this fact was a major flaw in America’s health care system.

However, the problem of pre-existing conditions existed primarily for people buying insurance in the individual market, where insurance is more expensive anyway. These consumers accounted for just 10 percent of those with health insurance, according to the Census Bureau.

4. “That’s what health insurance reform is all about, the peace of mind that if misfortune strikes, you don’t have to lose everything.”

President Obama is right that the key benefit of insurance—either health insurance or any other kind—is to guard against financial catastrophe.

However, Obamacare’s regulations and requirements mean that his attempt at reform actually does much more than just help people insure against massive healthcare costs. The law forces people to get benefits that they may not want.

As a result of these regulations, the cost of insurance actually goes up for many people, as the flow of stories from states last year proved. Ironically, these regulations actually make it harder for some people to insure themselves against the financial ruin that Obamacare was trying to prevent.

5. “If [Republicans] have specific plans to cut costs, cover more people, increase choice, tell America what you’d do differently. Let’s see if the numbers add up. … We all owe it to the American people to say what we’re for, not just what we’re against.”

One of the president’s rhetorical tactics has been to chastise Republicans for not having any positive ideas while simultaneously ignoring the ideas Republicans have put forward.

Several senators put out a health insurance reform proposal the day before President Obama’s speech. The latest proposal attempts to give consumers more choice and create a real market that will drive down the cost of health insurance through competition. Obamacare, by contrast, mandates that people buy insurance and then regulates exactly what they can buy and how insurers can sell it.

Andrew Evans   Email Andrew | Full Bio | RSS
Andrew Evans is an assistant editor at National Affairs and a former reporter for the Washington Free Beacon, where he covered government accountability and healthcare issues.

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