U.S. Sen. Ted Cruz, who has championed Republican efforts to stop the Affordable Care Act from rolling out, says some workers will lose employer-supported health plans under the law.
In a recent commentary, the Texan initially noted that President Barack Obama had said that Americans who like their health coverage could keep it. But Cruz disputed that, saying, “According to a recent Congressional Budget Office report, under Obamacare, 7 million people will lose their employer-sponsored insurance.”
We asked Cruz’s office to clarify, and a spokeswoman said he was drawing on the nonpartisan budget office’s latest 10-year outlook for the health care law.
The CBO’s report, issued Feb. 5, does not say how many workers are poised to lose employer-backed coverage. Instead, it gives projections for the number of Americans expected to have certain types of insurance by year over the next decade.
According to those CBO projections, the number of people who have employer-backed plans in 2017 will be 7 million less than the 162 million Americans who would have had such coverage if Obamacare were not law. Similarly, 3 million fewer individuals will be enrolled in group health plans, including Medicare, that year than if Obamacare were not law, a CBO chart indicates. More broadly, the chart also shows that fewer workers will have employer-supported plans in every year from 2014 through 2023 than if there had been no health care changes.
But those are projections based on two future scenarios: an America with Obamacare and without. Comparing those projections to today’s reality paints a different picture — and it shows that more Americans are expected to have employer-provided insurance over the next decade than have it now.
The CBO says that 154 million people have employer plans in 2013. Under Obamacare, that number is expected to increase to 155 million by 2017 and 160 million by 2023.
But those numbers are lower than what the CBO would’ve expected to happen if the new health care law were not in effect. If that had happened, the CBO would’ve expected 162 million to be covered by employer plans in 2017 and 167 million 2023.
The difference between the 162 million projection and the 155 million projection is the basis for Cruz’s statement that “7 million people will lose their employer-sponsored insurance” — even though more people will actually have such coverage compared with today.
We also found another wrinkle.
A year ago, the CBO adjusted its projection of employer-provided insurance coverage. The projection of 7 million fewer people covered by employer plans previously had stood at 4 million.
The CBO report says the increase was largely due to a big decision made after its previous forecast: Congress and Obama extended, rather than letting expire, most tax cuts passed into law under President George W. Bush. Lower income tax rates, it says, reduce the “tax benefits associated with health insurance provided by employers.”
CNN quoted James Klein, president of the American Benefits Council, a trade association for large employers, as saying that since employer-provided health insurance is not taxable, the CBO’s theory is that the benefits aren’t as valuable when tax rates are lower. So some workers — particularly lower-income individuals — may find it more desirable to forgo their employer’s coverage, CNN said, and seek insurance in the new health insurance exchanges, where they also may be eligible for a government subsidy. At the same time, CNN said, employers with large, low-wage workforces may find it financially advantageous to withdraw health coverage, even if they have to pay penalties set up by the law.
Our ruling: Cruz said that according to the CBO, “under Obamacare, 7 million people will lose their employer-sponsored insurance.”
Not exactly. This claim is a refraction of the budget office’s forecast, which says that in four years — 2017 and 2021 through 2023 — 7 million fewer workers will have employer-based plans than if Obamacare were not law.
In any year, it makes sense to expect some workers to lose employer-backed coverage. Things change. But the office’s 10-year forecast does not estimate how many workers will “lose” employer-sponsored plans. Conversely, it indicates that compared with 2013, more workers will have employer plans in all but one year of the decade.
This claim skews a single cherry-picked number from a multi-variable presentation. While there is an element of truth — fewer workers will have employer-supported plans than if Obamacare had not passed into law — the CBO report also indicates many Americans will obtain coverage from other sources.
We rate the statement as Mostly False.
Statement: “According to a recent Congressional Budget Office report, under Obamacare, 7 million people will lose their employer-sponsored insurance.”