In which Investor's Business Daily exaggerates something they didn't need to exaggerate.

Check out this headline from Investor's Business Daily:

Health Premiums Have Climbed $4,865 Since Obama Promised to Cut Them $2,500

Ouch. Sounds pretty bad, right? President Obama's "I'll cut premiums by $2,500 per family" promise has taken a lot of heat over the years, and rightly so. The figure originated in a back-of-the-envelope projection calculated by economist David Cutler, but referred to total healthcare costs:

We reached out to David Cutler, an economist who advised Obama during the 2008 campaign and helped calculate the $2,500 figure that appeared in Obama's speeches. He said the calculation encompassed total health care costs, not just premiums. These would include out-of-pocket costs, employer-provided insurance costs, and taxes to pay for public insurance programs.

Cutler acknowledged that Obama made "occasional misstatements” that tied the $2,500 reduction to premiums and not total medical spending. We can't judge whether Obama misspoke, but we checked the Project Vote Smart database of public statements by politicians, which shows that Obama said premiums (and only premiums) would go down for the typical or average family by $2,500 repeatedly. You can see examples throughout the arc of his 2008 presidential campaign here,here, here, and here.

The reality, of course, is that there are so many moving parts in the U.S. healthcare system, so many areas which the ACA has no control over (like, for instance, a former hedge fund manager buying up the rights to an $18 drug and jacking the price up to $750), and so many external economic factors at play (the economy/unemployment rate, etc) that there's no possible way that the President could promise a specific dollar figure reduction in healthcare premiums that far ahead of time.

In addition, there's the relative rate increase factor which has to be considered. Premiums were already going up 10-12% per year prior to the ACA being enacted, with no reason to think this trend might stop or slow down going forward. If premiums would have gone up 11% per year in 2014 and 2015 anyway, and instead only went up, say, 10% and 5%, that could be considered a reduction relative to what they would have gone up without the law.

In addition, there's the improved coverage factor. Consider my own family: In 2013, we paid $9,700 in premiums. In 2014, we paid $11,900...a $2,200 increase, ouch! HOWEVER, the new, ACA-compliant policy also included mandatory coverage of services we needed, which weren't previously covered. Result? We ended up saving $4,500 for the year over what we otherwise would have had to pay!

So...did our premiums increase $2,200? Yes. Did the ACA still end up saving us $4,500? Yes...and the premiums likely would have increased around $2,200 or more anyway.

You see this sort of thing all the time in politics. Let's say that the budget for some government program was scheduled to be increased from $1 Billion to $1.5 Billion, but the budget was changed and actually only went up to $1.25 Billion.

Result? During the political campaign, one candidate can correctly complain that the budget "increased by 25%" while the other candidate can claim that the budget was "slashed by $250 Million!" Both are completely accurate...depending on your perspective.

HOWEVER, the fact remains that yes, claiming a "$2,500 reduction in premiums" without including any caveats or context was a rather foolish thing for President Obama to say at the time...and if Investor's Business Daily had stuck with that, they might be on solid ground.

Except that they didn't. Read that headline again, then read the lede:

Health Premiums Have Climbed $4,865 Since Obama Promised to Cut Them $2,500

mployer-based health insurance premiums climbed 4.2% this year for family plans, according to an annual Kaiser Family Foundation report. That's up from 3% the year before.

Since 2008, average family premiums have climbed a total of $4,865.

The White House cheered the news, saying it was a sign of continued slow growth in premium costs.

STOP. Hold everything.

Yes, President Obama did indeed start using the "$2,500 reduction" line during the 2008 Presidental Election campaign season.

However, he didn't take office until January 2009, the ACA wasn't signed into law until March 2010, the first provisions didn't start until October 2010, the healthcare exchanges and Medicaid expansion didn't kick in until January 2014, the employer mandate didn't kick in until January 2015, and half the states chose not to implement Medicaid expansion at all.

The earliest point that a critic could plausibly start the clock running on the "$2,500 reduction" claim without being intellectually dishonest would be 2014, not 2008.

Now, premiums have continued to increase (albeit at a lower rate so far) since 2013. I'm not sure how much, but let's say they went up an overall average of $50/month in each year; that would be +$600 in 2014 and another $600 this year, for a total increase of $1,200.

Obviously that would still be on the opposite side of the $2,500 reduction claim; strictly speaking, even a reduction of $2,499 per year coult be considered a "violation" of the President's "$2,500" number...but IBD couldn't leave it at that.

They felt the need to cheat to win a point they would have "won" anyway.