Monday, the non-partisan Congressional Budget Office released its report forecasting the effects of the American Health Care Act, the Republican plan to repeal and replace the Affordable Care Act (a.k.a., Obamacare). The report predicted a federal deficit reduction of $337 billion between 2017 and 2026, and reduced outlays of $1.2 trillion. However, it also estimated an additional 24 million uninsured Americans by 2026, compared to the current totals under Obamacare — 14 million by 2018.
Deficit reductions would primarily be due to reduced spending on Medicaid and government subsidies for individual consumers, according to The Washington Post.
The CBO is the agency that provides economic data to Congress. Its current director is economist Keith Hall, who was previously appointed Commissioner of the Bureau of Labor Statistics by President George W. Bush. Later, Hall served as Chief Economist for the White House Council of Economic Advisers under President Barack Obama.
The Republican Response
Some Republican leaders have argued that the CBO’s numbers are inaccurate. Mick Mulvaney, director of the Office of Management and Budget, told CNN that the CBO is “terrible at counting coverage.”
“The CBO is assuming if you get Medicaid, once the mandate is gone, you will give up your free Medicaid and replace it with nothing,” Mulvaney told Chris Cuomo on CNN’s New Day. “The CBO is full of errors — not errors, they’re just bad assumptions like that. That’s the only way you can get to these bad numbers.”
Mulvaney also dismissed a Politico report that claimed that the OMB’s estimates of coverage losses were even steeper than the CBO’s, saying that he hadn’t seen it.
“And if there’s a document, it would have used the CBO numbers because they are the only ones around, and we think they are deeply flawed, so you can’t put too much credit on that document,” he said.
Mick Mulvaney, director of the OMB, says that the CBO is “terrible at counting coverage.” Is he right?
How Accurate Was the CBO at Estimating Coverage Under Obamacare?
The CBO released its Obamacare enrollment projections in 2010, estimating that 21 million Americans would buy coverage through the ACA by 2016. Only 11.5 million consumers did so by that time — 9.5 million fewer than estimated. The CBO also estimated that the number of uninsured would drop by 30 million. Later, it revised its estimate downward to 22 million.
“Still, experts said CBO’s forecasts were reasonable at the time,” writes Allison Graves at Politifact. Graves continues:
“With respect to precise quantitative point estimates, the differences between CBO’s estimates and actual experience are well within the range that I would expect given the scope of the change CBO was being asked to analyze,” said Matthew Fiedler, a fellow with the Center for Health Policy in Brookings’ Economic Studies Program.
Fiedler also noted that CBO’s “big picture” assessment of the impact of the ACA on insurance coverage was on point. Specifically, the agency estimated a significant decrease in the number of people without health insurance that would leave the uninsured rate at a historic low, which is what occurred, he said.
In addition, the figure ignores the fact that the 2010 prediction couldn’t account the Supreme Court decision about Medicaid expansion that allowed each state to decide for itself. Nineteen states have refused to expand Medicaid eligibility.
In short, it’s not that the CBO’s methods or abilities are suspect, but that things changed after it released its initial estimates. Given that the Republicans’ replacement for Obamacare is still under discussion and negotiation, that could be the case again. But it’s useful to have their data as a starting point, before policy is made.
Tell Us What You Think
What’s your take on the CBO’s report? We want to hear from you. Tell us your thoughts in the comments or join the conversation on Twitter.