The CBO Score Is Not a Political Document

The ball in Times Square hit zero Wednesday evening for the Congressional Budget Office’s latest projection of the American Health Care Act. As with the agency’s estimate of an earlier version of the bill, the document was immediately put to political use. “The Congressional Budget Office just handed Democrats a gift for the 2018 campaign,” CNN’s Chris Cillizza wrote. Republicans sounded disharmonious notes in their responses: Speaker Paul Ryan greeted the report positively, but Health and Human Services secretary Tom Price called it “wrong,” and Rep. Tom MacArthur, who sponsored a controversial amendment that shored up conservative support for the legislation, said the CBO staff weren’t “prophets.”

MacArthur’s reaction is most fitting. The forecast can only be used as a campaign bludgeon if its topline number is manipulated like an animal balloon. But the CBO’s score isn’t all good news for the GOP. Nor is it necessarily all “wrong”: It’s a projection, full of variables and assumptions about people’s behavior that can be neither proved nor disproved. Granted, there are even more such uncertainties in this estimate of the bill than there were in the previous one. And the agency has had a poor track record on health care.

First, the political takeaways. Cillizza writes the Democratic playbook that would’ve been in production with or without the media’s help: “The idea that 23 million people who would have health care if President Trump and Congressional Republicans do nothing will lose it under Trumpcare is going to be an extremely difficult case to make.” The use of the word “lose” in this case is nonsensical, not only misleading (just as it was in March). It implies that 23 million people who currently have coverage would be forced off it if AHCA were to become law. There is no other logical way to apply this verb. But that is not what the CBO says.

The only reason the GOP has a difficult sell with this figure, as Cillizza writes, is because the press won’t properly contextualize it and challenge Democrats when they misuse it. If only there were professionals who could set the record straight.

The 23 million figure comes mostly from changes to Medicaid that were already contained in the original health care legislation. Fourteen million fewer people are projected to be on the federal-state program by 2026, partly as a result of the bill’s rollback of Obamacare’s Medicaid expansion. Six million fewer people are estimated to be in the individual market by that same time, a mix of multiple factors spread over different years: Some individuals would forgo insurance without the individual mandate penalty in place, some would decline it starting in 2020 because the tax credits for purchasing it are less generous than subsidies available under current law, and some would gain employer-sponsored plans as more businesses offered coverage. There are serious policy matters baked into these numbers; even conservative experts have wondered if the AHCA’s incentives, including its coverage gap penalty, are robust enough to entice people to buy insurance. These questions are not, however, baked into the political meaning of the term “23 million.”

This most recent CBO forecast introduces new uncertainty into its findings. The MacArthur amendment to the AHCA would allow states to conditionally waive Obamacare mandates requiring insurers to offer a set of essential health benefits in all plans and charge consumers of the same age a similar premium regardless of medical status. The implications of this approach are multilayered: Plans without EHBs would be cheaper and more attractive for some to purchase, but costs to the people who need such coverages would stand to rise. Likewise, plans that factor health status would become significantly more expensive to higher-risk individuals who failed to satisfy a 63-day coverage gap requirement. The legislation includes money to directly support such people facing greater costs.

There are a number of considerations: How many states would adopt these waivers, and to what extent? And which states? All else being equal, the same choices made in Utah, which has a young population, and Iowa, which has an older one, would almost certainly produce different effects on their insurance markets. Is the risk pool funding sufficient to prevent certain individuals from experiencing inordinate financial hardship?

These all cannot be answered perfectly in a budget score like this one, as the CBO attests. “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, so the estimates discussed in this document are uncertain,” the report reads. Later: “The array of market regulations that states could implement makes estimating the outcomes especially uncertain.”

“Uncertain,” then “especially”—looks like the agency understands its people aren’t prophets.

Some of its conclusions are intriguing, weighed against anecdotal evidence. For example, it predicts that one-sixth of the population resides in states that would take full advantage of the Obamacare waivers. This is possible, of course; there’s no way to disprove it, and the agency’s scrutiny of state insurance markets before the Affordable Care Act was signed provides some heft to its findings. However, only three governors have gone on the record saying they’d contemplate the waiver approach: Wisconsin’s Scott Walker, South Dakota’s Dennis Daugaard, and, as told to THE WEEKLY STANDARD, Mississippi’s Phil Bryant. Perhaps there are more of them, mindful of the blowback Walker received for showing interest or the reality that the AHCA will not become law. Whatever the case, as the CBO writes, “[T]he smaller the number of states choosing waivers, the less their responses would affect estimates for the nation as a whole.”

The report invites plenty of other questions: For instance, as Phil Klein noted, “CBO’s logic is a bit weird—arguing that markets will become unstable if insurance pools have more healthy people and fewer unhealthy [people],” which is counterintuitive. It also determines that an $8 billion fund over five years dedicated to lowering the premiums or out-of-pocket costs to consumers in waiver states “would not be sufficient.” Maybe so. But as the CBO admits, the fewer states that apply for waivers, the further the money goes—and it’s unclear if this also takes into account a $100 billion fund over nine years that states could use for a similar purpose.

These are topics for a policy process. But the AHCA has traveled a political road—and at a high speed, for how rushed the legislating has been. Whatever the Senate produces is likely to rattle amid a comparable level of noise. This nature of the debate is worth bearing in mind as politicians and the media use a wonk’s guide to health care reform to examine and advance political agendas.