The CBO seems to
deliver whatever justification is asked for by the Congress based on the latest
band-wagon fad, rather than any solid financial analysis. Bills are voted on based on horse-trading and
increasing government control, not actual need.
The removal of the
Obamacare Mandate should logically assume that many of the 50% healthy
individuals in the US who don’t use healthcare would drop their coverage if
costs were too high. See article below:
Government
report reveals CBO was scandalously off in Obamacare estimates, by Philip Klein,
2/20/19.
A new report from government actuaries has
revealed that the Congressional Budget Office was scandalously off in its
estimates of the impact of Obamacare's individual mandate, a miscalculation
that has had significant ramifications for healthcare and tax policy over the
past decade.
CBO estimates about the importance of an
individual mandate to a national healthcare scheme prodded President Barack
Obama into including the unpopular provision into the law in the first place.
The mandate projections also played a key role in President Trump's two major
legislative initiatives. The fact that the CBO assumed 14 million could lose
coverage mainly due to the elimination of mandate penalties helped kill the
effort to repeal and replace
Obamacare, while its later assumption
that 13 million fewer insured individuals would mean less spending on subsidies
from the federal government helped get the 2017 Republican tax cut across the
finish line by improving the budgetary math. Yet those incredibly influential
estimates now appear to have been wildly off.
In what was literally a footnote in its
annual report on national health
spending projections,
actuaries for the Centers for Medicare and Medicaid Services on Wednesday
estimated that the elimination of the individual mandate would have a
significantly smaller impact than the CBO has long estimated. Specifically, the
CMS report revealed that 2.5 million more people would go without insurance in
2019 due to the repeal of the individual mandate's penalties, and the impact
would be "smaller" thereafter.
When Obamacare was being debated in
2009, CBO and other outside experts believed that the mandate was a necessary
tool for convincing younger and healthier individuals to purchase insurance to
offset the cost of covering older and sicker enrollees in any kind of national
healthcare scheme. So important was the mandate to CBO's analysis that Obama
was forced to embrace the idea, even though he opposed it during the 2008
campaign and it made the legislation less popular. It also would eventually
imperil the whole law at the Supreme Court.
Over time, as Obamacare was implemented,
experts began to question the importance of the mandate. But when Republicans
sought to repeal and replace Obamacare in 2017, the CBO did not adjust its
assumptions about its power. For instance, in one version of the House bill, the
CBO found that before any cuts to actual spending went into effect, 14 million
fewer people would be insured and that, "Most of the reductions in
coverage ... would stem from repealing the penalties associated with the
individual mandate." Incredibly, the CBO estimated that 5 million fewer people would enroll in free
Medicaid mainly due to the elimination of the penalties. This number accounted
for more than half of the 24 million the CBO said the Republican plan would
reduce coverage for overall over a decade.
While any CBO analysis of the Republican
bills was likely to project large coverage losses due to the cuts to Medicaid
and subsidies, if CBO had more realistic assumptions about the mandate, the
numbers would have been significantly smaller, and perhaps left more room to
convince centrist Republicans to get on board.
On the flip side, the CBO's wild
assumptions about the mandate benefited the GOP when it came to passing the tax
law in 2017. Then, the CBO estimated eliminating the penalties would mean
4 million fewer people having coverage in 2019, and 13 million fewer overall.
The CBO said this would save $338 billion, mainly due to lower spending on
Medicaid and insurance subsidies, giving Republicans more paper savings to work
with to provide a more substantial tax cut and secure final passage.
But the CMS actuaries, while
acknowledging that the elimination of the mandate penalties would have some
effect on enrollment in private coverage, write in footnote #2 toward the
bottom of their report on national health projections,
"By 2019 the individual mandate
repeal is anticipated to result in about 1.5 million fewer
direct-purchase-market enrollees, who are expected to be somewhat younger and
healthier than those who retain coverage, as well as about 1.0 million fewer
employer-sponsored-insurance-market enrollees, than otherwise would have been
projected. After 2019 the enrollment effects are expected to be smaller.
Medicaid enrollment is assumed to be unaffected."
This is consistent with other data we've
received since the mandate was repealed as part of the 2017 tax law suggesting
a relatively modest impact. For instance, after all the warnings of massive
fallout from the elimination of the penalties, 8.4 million signed up for coverage on the
federal Obamacare exchange for 2019, down just slightly from 8.7 million a year earlier, when the mandate
was in place.
Given the outsized influence that the
CBO has on policymaking in Washington, the CBO's misfire on the individual
mandate should be a major story.
Norb Leahy, Dunwoody
GA Tea Party Leader
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