Obama's Health Care Claims

Summary
We found several claims in Obama's recent health-care sales pitches that could use some explanation or qualification.

He said "the average family pays a thousand dollars in extra premiums to pay for people going to the emergency room who don't have health insurance." That's from a recent report by Families USA, a group that lobbies for expanded government coverage. But another study for the authoritative Kaiser Family Foundation thinks that figure is far too high.

The president said the estimated $1 trillion cost of his proposals is "less than we are projected to have spent on the war in Iraq." Maybe. But so far, Iraq war costs are around $642 billion.

He said that the U.S. spends 50 percent more per capita on health care than the next most expensive country. Not quite. We spend 20 percent more than the second most expensive country, and 50 percent more than the third.

On other points we found the president's facts checked out. For example, many countries that spend much less on health care nevertheless have higher life expectancy than the U.S. And while we find it doubtful that the uninsured cost other families $1,000 in higher premiums alone, once higher taxes and higher medical costs are factored in, the price tag for the uninsured could well be that high.

Analysis
President Barack Obama has made health care the focus of recent speeches, including one in Green Bay, Wisc., on June 11 and another at the American Medical Association conference in Chicago on June 15. While many of the statistics he cited on the state of health care in the U.S. were correct, we found problems with a few of them.

Shifting Costs
On June 11, Obama said that insurance premiums increase to cover the cost of health care for the uninsured, to the tune of $1,000 per family. The implication, of course, is that providing the uninsured with coverage would save others that much.

Obama, June 11: The average family pays a thousand dollars in extra premiums to pay for people going to the emergency room who don't have health insurance. So you're already subsidizing other folks; it's just you're subsidizing the most expensive care.

Democratic Sen. Dick Durbin of Illinois repeated these claims on CBS' "Face the Nation" on June 14:

Durbin, June 14: Well, keep in mind, now, everyone today faces a hidden tax estimated for most families at $1,000 a year that we pay in health insurance premiums that we shouldn't pay. It's money that we're paying to cover those who have no health insurance and to really sustain a bloated system, a system that really needs efficiency.

Do insured families really pay $1,000 in extra premiums to carry the uninsured? The figure doesn't come from thin air. A 2005 report by health care advocacy group Families USA found that this "cost shifting" amounted to $922 per family or $341 for those insured individually, and a May 2009 update revised those numbers to $1,017 and $368 respectively. The liberal Center for American Progress, also updating the 2005 Families USA estimate, reported in March 2009 that "8 percent of families' 2009 health care premiums – approximately $1,100 a year – is due to our broken system that fails to cover the uninsured." These calculations are based on distributing "uncompensated care" – care provided to the uninsured that's not covered out of pocket or by private or public funds – over the insured population.

But the claim is disputed. A 2008 report conducted by researchers from the Urban Institute for the nonpartisan Kaiser Family Foundation examined the first Families USA study, and found its claims to be unconvincing. They concluded: "[W]e are highly skeptical that the high and growing cost of private insurance is strongly related, if at all, to the amount of uncompensated care delivered by private providers or to the growing number of uninsured people."

Jack Hadley, the lead researcher on the KFF study, told us that to assume that the insured end up paying for all uncompensated care is "clearly an exaggeration." According to KFF, the amount of uncompensated care that providers could shift to the privately insured is much less, only $8 billion, not the $42.7 billion Families USA said could be passed on to premium payers in 2008. The KFF number is less than 19 percent of Families USA's, and by our figuring that implies a per-family increase in health insurance premiums of less than $200 a year, not $1,000.