Be skeptical of CBO estimates
Obamacare is wrecking individual and small group markets. This year, premium cost increases in the individual markets are averaging 25%, and the thousands of dollars in deductibles are breathtaking. Many middle-class folks in these markets are stuck paying the equivalent of a second mortgage.
Washington’s inflexible regulations are also helping to jack up health care costs, pricing younger and healthier persons out of the market, and thus driving costs even higher. This costly experiment in government central planning has resulted in shrinking enrollment, sharply declining competition and narrow medical networks.
There’s nothing new here. In the 39 states with federal exchanges, HHS reports, average monthly premiums rose from $232 to $476 from 2013 to 2017.
Congressional Republicans promised to fix this mess, and the Congressional Budget Office has given their bill a mixed review. The fiscal news is positive, with CBO estimating the legislation would cut the deficit by $119 billion over 10 years. But the insurance coverage news is negative, with CBO estimating that 23 million fewer persons would have health insurance in 2026.
The GOP should be skeptical of CBO’s coverage estimates. It has been an abysmal performance. For example, CBO projected initially that 21 million persons would enroll in exchange plans in 2016. The actual enrollment: 11.5 million.
To be fair, the CBO admits the uncertainty of its own estimates: “Such estimates are inherently uncertain because of the ways in which federal agencies, states, insurers, employers, individuals, doctors, hospitals and other affected parties would respond to the changes made by the legislation are all difficult to predict.”
Congressional Republicans should take a deep breath. While they should take CBO’s report seriously, they must not treat CBO projections as Holy Writ. They should use the Senate version of their bill to fashion good policy that will further reduce costs and protect the vulnerable. They need to fulfill their promises and press ahead.