“Limited empirical validation” is a fancy social science term for using an anecdote to make a broader point that is not actually supported by the evidence. That’s what Donald Trump did recently at a campaign event when he touted a proposed 60% increase in Blue Cross premiums in the Affordable Care Act marketplace in Texas. This was accurate. Mr. Trump also predicted further huge increases, timed for after the election, that he suggested would lead to the downfall of the ACA.
News reports across the country are mentioning outsize proposed premium increases from some plans in some marketplaces.
Many news reports have been careful to say that these outsize increases are not typical, nor the whole story. But there is a wider misperception about Obamacare premium increases: Many Americans insured through their employers wrongly believe that these large premium increases apply to them though only a much smaller group is affected.
As the chart above shows, more than 80% of Americans have heard or read news reports about premium increases that have focused on proposed increases in the ACA marketplaces. Sixty-eight percent think those increases apply to all insurance plans or to employer plans, through which 154 million Americans get coverage. In fact, they apply only to the ACA marketplace plans, through which about 11 million people are enrolled. Just 10% of the public understands that the increases they were hearing about apply only to marketplace plans.
Critics of the ACA have had some success blaming it for general problems in the health-care system. People may read news stories on premium increases as validating criticisms they have heard about the ACA.
People may also not know when an outlier is an outlier. They may read about proposed 20%, 30%, or 40% increases in premiums for a marketplace plan in their state and not know whether the average increase across all plans is lower, whether it will affect their plan, or that they can shop for a much cheaper plan. A Kaiser Family Foundation analysis of commonly selected benchmark “Silver Plans” in 14 major cities found that the proposed average increase was 10%. That double-digit annual increase is about twice the size of increases in the group market, but it is far less than the 60% in Texas that Donald Trump recently mentioned. And, notably, most people in the marketplaces do not pay the premium increases; 85% receive government-funded premium subsidies. The government–meaning the taxpayer–pays.
The news media’s core job is to find and cover the news. Still, whether the issue is health care, Islam, or climate change, news reports fill knowledge gaps and correct misperceptions. There isn’t anyone or anything else in our system fulfilling such a role right now.