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Office of prognostication

(Jim Lo Scalzo/EPA/Newscom)

Money

Office of prognostication

The Congressional Budget Office’s healthcare predictions aren’t a reliable guide for lawmakers

With the GOP promising a “repeal and replace” of Obamacare, all eyes have turned to the U.S. Senate. The House passed a repeal-and-replace bill, the American Health Care Act, on May 4, and while the Senate is widely expected to make adjustments to the House plan, the reconciliation process gives senators a path to repeal and replace that requires only 51 votes, versus the 60 normally needed to prevent a filibuster.

One thing worrying advocates of this repeal-and-replace plan is that Senate votes could be swayed by the dire forecasts of the Congressional Budget Office. The CBO is a nonpartisan group whose job is to “score” various legislative proposals and predict their numerical impacts. CBO projections are known to scare some senators away on certain votes, and they also are known to provide cover for senators looking for a fiscal stamp of approval. That’s true whether the legislation be a spending bill, a tax proposal, or something more complex, like this healthcare legislation.

The Congressional Budget Office has forecast an additional 23 million uninsured Americans by 2026 if the House bill becomes law. It is ironic that such dire projections from the CBO could threaten a repeal and replace of Obamacare, since it was the CBO’s rosy projections about Obamacare that allowed the 2010 healthcare overhaul to pass in the first place. The office’s original projection was that 23 million Americans would have signed up on the exchanges by now, a figure nearly double that of the actual 12 million enrollment. Perhaps it was just too hard to project with accuracy seven years in advance?

Fair enough, but just last year the CBO projected 15 million enrollments on the exchange, a figure still 25 percent higher than the actual total proved to be. In its scoring of the present legislation, the CBO is not only going out 10 years to make its projection, despite a woeful record in both short- and long-term projections, but it is completely ignoring the waivers the new bill allows all 50 states to claim from certain parts of Obamacare. Each state could end up with a totally different mix of results, creating a landscape that makes enrollment projections impossible. In other words, there is no scientific way for the CBO to accurately forecast the bill’s effects.

Ironically, the same CBO report that predicted the House plan would leave 23 million additional Americans without insurance also scored the bill to be a deficit reducer (to the tune of $119 billion), a tax reducer (by just shy of $1 trillion), and a spending reducer (by well over $1 trillion over 10 years through the elimination of subsidies). These parts of the CBO projections apparently did not warrant much media coverage.

The CBO itself doesn’t deserve criticism for its consistent missing of the mark with things very difficult to predict. The nonpartisanship of the CBO is not really at question: The sheer viability of its task is.

But senators who let CBO reports dictate their vote deserve criticism, given the office’s historical track record and the impossibility of its objective.

Comments

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  • Greg Eades
    Posted: Thu, 06/29/2017 10:02 am

    Very helpful article.  Thank you.

  • JACKIE PARFET
    Posted: Thu, 06/29/2017 12:06 pm

    This financial institution analisys from 2015 seems to come to a different conclusion concerning CBO estimates of ACA in 2010

    http://www.commonwealthfund.org/publications/issue-briefs/2015/dec/cbo-c...

  • E Cole
    Posted: Tue, 07/04/2017 11:28 pm

    It seem disingenuous to applaud the huge savings due to the elimination of subsidies while casting doubt on the fact that the people who will lose or get reduced subsidies may not be able to afford insurance. You really can’t have it both ways, hence our problem finding a good solution.