White House op-ed: CBO methodology 'fundamentally flawed'
Posted July 15
The White House is calling the Congressional Budget Office's methodology for estimating the impact of Republican health care legislation "fundamentally flawed" ahead of an upcoming release of a new assessment of the Senate bill.
Marc Short, the White House's director of legislative affairs, and National Economic Council aide Brian Blase wrote an op-ed published in The Washington Post calling the CBO's assessment of the bill, which would repeal and replace the Affordable Care Act, unreliable.
"In the coming days, the Congressional Budget Office will release an updated analysis of the Senate bill to repeal and replace Obamacare," the op-ed reads. "The CBO will likely predict lower health insurance coverage rates if the bill becomes law. The American people and Congress should give this prediction little weight in assessing the bill's merit."
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It continues: "The CBO's methodology, which favors mandates over choice and competition, is fundamentally flawed. As a result, its past predictions regarding health-care legislation have not borne much resemblance to reality. Its prediction about the Senate bill is unlikely to fare much better."
The CBO, a nonpartisan federal agency charged with providing budget and economic information to Congress, could release the updated assessment as soon as Monday. It reported in June that an earlier version of the Senate health care bill would leave 22 million fewer Americans with health insurance by 2026 than would be covered under Obamacare.
The CBO also found the bill would reduce deficits by $321 billion over the next decade.
In the op-ed, Short and Blase argue that the CBO failed to recognize problems that occurred after the implementation of the Affordable Care Act.
"Today, there are only 10 million people enrolled in exchange plans -- about 60 percent fewer than expected. ... " they write. "Absent the projected bounty of young, healthy consumers, health insurers are abandoning the exchanges, leaving a third of American counties with only one insurer to choose from. As insurers continue to flee the exchanges, consumers will face even fewer options next year. And while choice is declining, costs are skyrocketing. ... The CBO failed to foresee any of this."
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The Trump administration and Congressional Republicans have been attacking the CBO for months, downplaying the agency's reviews of their efforts to repeal Obamacare. The CBO's projections that millions fewer Americans would have insurance and federal support of Medicaid would be slashed have unnerved many moderate GOP lawmakers and given ammunition to critics of the repeal effort.
As for how well CBO estimated the impact of Obamacare, it's true the agency overestimated how many people would enroll in the exchanges set up by the law. That's in part because fewer employers than predicted dropped coverage.
However, the agency was much closer to the mark on Obamacare's overall impact on the nation's insured rate. It had originally predicted that 92% of non-elderly adults would have coverage in 2016, revising that figure to 89% after the Supreme Court ruled in 2012 that expanding Medicaid was optional for states.
It turns out that 89.7% of Americans under age 65 had insurance last year, according to Centers for Disease Control and Prevention data.
As for premiums, insurers actually set their 2014 rates lower than the CBO projected, partly because they did not know how to judge the new exchange markets and because they were looking to attract enrollees.
There's no doubt that Obamacare was troubled before Trump was elected. Many insurers hiked rates substantially for 2017, while others pulled out of the market after racking up big losses. However, several analyses have shown that the individual market is stabilizing and many insurers are no longer bleeding money.
Now, it's the Trump administration and Republicans on Capitol Hill who are prompting carriers to raise rates and flee the market. Many are unnerved by the uncertainty emanating out of Washington D.C., citing that as a main reason they are asking for big premium hikes or washing their hands of the exchanges.
The Senate revised its health care legislation this week with the goal of being able to gain support from more conservative lawmakers. The changes include an amendment by Texas Republican Sen. Ted Cruz -- a version of his own overhaul bill -- that would allow insurers offering Obamacare plans to also provide cheaper, bare-bones policies.
The House passed its version of an Obamacare repeal bill in May. That legislation would leave 23 million fewer Americans with health insurance by 2026 than under the Affordable Care Act, the CBO said.
Republican leaders have said they want to vote on the bill, or at least to take the procedural steps toward a vote, by next week.