Fact check: What Eric Hovde gets wrong about the Affordable Care Act

Millionaire banker and real estate developer Eric Hovde made his opposition to the Affordable Care Act a centerpiece of his unsuccessful 2012 campaign for the Wisconsin Republican U.S. Senate nomination. Twelve years later, he is repeating the same strategy as he seeks his party’s nomination again to challenge Democratic Sen. Tammy Baldwin.

More than 260,000 Wisconsinites enrolled in Obamacare in the last open enrollment period between Nov. 1, 2023 and Jan. 16, 2024, Wisconsin Gov. Tony Evers said on March 22.

Hovde’s campaign website criticizes the ACA, commonly known as Obamacare, claiming it’s made the system of health care in the country worse since it was enacted in 2010. But the claims he makes aren’t accurate, and in some cases don’t relate to the ACA at all, according to a fact check by the Wisconsin Independent and analyses by two independent experts.

“He’s taking all these legitimate things about how our health care system is broken and he’s saying it’s because of the Affordable Care Act, when it’s absolutely not the case,” said Donna Friedsam, a researcher with the University of Wisconsin Institute for Research on Poverty.

Hovde’s campaign did not respond to a request for comment by the Wisconsin Independent.

So what does Hovde say about Obamacare?

Has the quality of health care worsened because of Obamacare? No.

Hovde claims the quality of health care has decreased over the last decade largely as a “result of the failures of Obamacare.”

“It’s just flatly untrue,” said Andrea Ducas, vice president of health policy with the Center for American Progress Action Fund.

The policy has actually helped improve the quality of health care, both Ducas and Friedsam said, because the policy holds providers to higher standards.

Health outcomes, on the other hand, have not improved, Friedsam said. But this is due to factors outside of a doctor’s office, such as socioeconomics and racism.

“But if you’re talking about the quality of health care services and what happens in a clinical environment, that has been improving over the last decade,” Friedsam said.

Did the ACA cause insurance premiums to increase? It’s complicated.

Hovde claims that insurance premiums have “doubled, in some cases tripled” because of Obamacare.

While the cost of insurance has been increasing, as it was before the ACA, Friedsam said it’s largely been felt by health insurance companies that now have to cover and pay for more services, such as preventive care, prescription drugs or childbirth.

“Health insurance has become more expensive, but the other thing about it is that the ACA increased coverage in health insurance. So in Wisconsin we reduced the number of uninsured people by nearly half. So yes, health insurance costs more, there’s no doubt about it. But people get more covered by their own health insurance,” she said.

Ducas said it is like comparing apples to oranges, though, because insurers didn’t have to cover as much before Obamacare. “It’s important to note that the product you’re buying is different,” she said. “There’s actual standards around the product you’re buying.”

Did Obamacare cause health care costs to rise? No.

Hovde makes multiple claims that the ACA increased health care costs.

“The Affordable Care Act did not do anything to increase the overall cost of health care,” Friedsam said. Instead, she said, health care costs have leveled off since the ACA was passed. More people have coverage now because of the ACA, Ducas said, meaning fewer out-of-pocket costs for patients.

Hovde also claims that health insurance companies were incentivized to cut costs before the ACA and that now they need to increase costs to make a profit.

“Honestly, I laughed when I read it because I’ve never heard that take on it before and I thought it was absolutely absurd,” Friedsam said.

To start, Friedsam said, health insurance companies were saving money and making a profit by limiting who received care, not by being more efficient.

The ACA implemented what’s known as a medical loss ratio, which requires insurance companies to spend at least 80% of a person’s premium on that individual’s health care, leaving the insurers with the remaining 20% as profit.

“It just simply is not a fact. They can’t just decide to increase overall health care spending. It’s not an option for that,” Friedsam said.

Ducas said that if Hovde’s claim were true, insurance companies would not reject so many claims on the basis of a lack of prior authorization. “That’s also inconsistent with the idea that they don’t care how much money they spend on care,” she said.

Did the ACA cause prescription drug prices to skyrocket for people with preexisting conditions? No.

Hovde says that “many people, including those with preexisting conditions like myself, saw their drug prices skyrocket.” He notes that he has lived with multiple sclerosis, or MS, for more than 30 years.

Rising drug prices are a complex, decadeslong issue that has nothing to do with Obamacare, Friedsam said. Instead, more reliance on prescriptions for patient care and patent protections for pharmaceutical companies are causing price surges.

“What is interesting to note here is that we have had certain people in Congress and presidents pushing to try to get the federal government to be able to negotiate for lower drug prices, using the strength of the federal government to lower drug prices. And it’s been exactly the party that Hovde is affiliated with that opposes that,” Friedsam said.

She noted that before Obamacare, people with preexisting conditions weren’t guaranteed health insurance. About 2.4 million Wisconsinites have preexisting conditions, Evers noted in March.

“Health insurance companies could simply say that, No thank you, we’re not going to give you health insurance. So the Affordable Care Act made that illegal and health insurance companies are required to provide coverage for them now. And so I do find that odd that he’s noting his preexisting conditions but doesn’t note that he’s protected under the Affordable Care Act,” Friedsam said.

Correction April 3: Updated to reflect that Andrea Ducas is the vice president of health policy with the Center for American Progress Action Fund.