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July 24 2017

The CBO's Secret Sauce: Why All "Lost" Coverage Scores are Nearly the Same

by Charlotte Hays

A false assumption may be leading to faulty predictions in CBO scoring of various GOP health proposals with regard to the people who'd lose their health insurance under the different GOP plans.

Health policy expert Avik Roy, a supporter of the embattled Senate health care bill, looked at the CBO's estimates of the various proposals and found something striking: consistency. Roy writes:

In the national debate over the GOP health reform proposals, one data point has stood out above all others: the estimate, from the Congressional Budget Office, that more than 20 million people would “lose” coverage as a result. And there’s been an odd consistency to the CBO’s projections. Do you want to repeal every word of Obamacare and replace it with nothing? CBO says 22 million fewer people would have health insurance. Do you prefer replacing Obamacare with a system of flat tax credits, in which you get the same amount of assistance regardless of your financial need? CBO says 23 million fewer people would have health insurance. Do you prefer replacing Obamacare with means-tested tax credits, like the Senate bill does, in which the majority of the assistance is directed to those near or below the poverty line? CBO says 22 million fewer people would have health insurance. 22 million, 23 million, 22 million—these numbers are remarkably similar even though the three policies I describe above are significantly different. Why is that?

The helpful bolding is from Guy Benson, who did an excellent analysis of Roy's original article. It helps us see at once how the CBO estimate, no matter which GOP proposal is being evaluated, is similar to other estimates. Why the same results no matter the plan?

Roy points out that this consistency is the result of the CBO's reliance on ObamaCare's individual mandate, a requirement that forces people to either purchase a health insurance that the government approves or pay a fine for going without insurance. Roy writes: 

The principal way to explain these three results from the CBO model—nearly identical coverage numbers despite substantially divergent resources directed to low-income individuals to afford coverage—is to remember that the CBO’s model is heavily tied to the idea that the individual mandate is forcing all sorts of people to buy coverage that otherwise would not.

In the latest report, the CBO estimates that 15 million people would voluntarily drop out of the market in 2018 due to the repeal of the mandate. That’s nearly three-quarters of the total coverage loss, in one year.

Another factor is the fact that the minus-22 million coverage score for RAHFRA assumed that all of Obamacare's regulations were repealed. The House and Senate bill repeal or revise the costliest of these regulations, but not all of them. Another way to think about this is that Republicans could have cut spending by another $616 billion if they had the power to repeal all of Obamacare's regulations via reconciliation (they don't).

There’s a simple way for Republicans to highlight the CBO’s mandate mania: have CBO score one version of the bill with an individual mandate, and one version without. It’ll make as plain as day what those of us who follow this stuff see up close: that the mandate is the secret sauce driving the CBO’s faulty coverage predictions.

In other words, the CBO is talking about people who are now forced to buy insurance under penalty. The CBS assumes that these people would not buy insurance otherwise. My bolding this time.) If so, this loss would be the result of people making a decision without coercion.

However, we don't really know how many of these people, if offered different policy options (maybe a policy tailored to individual or family needs rather than ObamaCare's expensive policies that include coverage for procedures one is unlikely to ever use?), would purchase a policy of their own accord, without being fined for not doing so. A plan that is affordable and fits their needs--I bet some of that 22 million would jump at the chance.

Of course, it is important to talk about coverage, and we want people to have the peace of mind that comes with good health insurance.

But the more important issue is the quality of health care provided under a policy. ObamaCare policies may provide a nice card to put in your wallet, but all too often they do not provide access to quality medical care.

Independent Women's Forum is an educational 501(c)(3) dedicated to developing and advancing policies that aren’t just well intended, but actually enhance people’s freedom, choices, and opportunities. IWF is the sister organization of the Independent Women’s Voice.​
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