The fundamental error in the CBO’s health-care projections
Marc Short and Brian Blase
July 15, 2017
In the coming days, the Congressional Budget Office will release an updated analysis of the Senate bill to repeal and replace Obamacare. 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.
The reason: 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 forthcoming analysis of the Senate bill will likely contain additional projection errors. It will almost certainly assume that many additional states would expand Medicaid under Obamacare, even though other agencies, such as the Office of the Actuary at the Centers for Medicare and Medicaid Services, have determined this is highly unlikely. An assumption that states will expand Medicaid means that the CBO will determine that millions of people will “lose” Medicaid coverage under the Senate bill — but these people were never enrolled in the first place.
The American people — and their representatives in Washington — deserve the most accurate assessment possible of the effects of critical health-care legislation. Although the CBO generally plays a valuable role in the legislative process, as Obamacare’s ongoing failure clearly demonstrates, the CBO’s health-care model is fundamentally flawed. The CBO’s failure to update the model means its forthcoming analysis of the Senate bill will be no better — and perhaps worse — than its disproven Obamacare projections. Although the media and the political left will certainly seize on it, the CBO’s estimates will be little more than fake news.