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On healthcare bill, nothing to CBO here

May 25, 2017

The Congressional Budget Office on Wednesday released its report on the American Health Care Act, which passed the House earlier this month. The agency projected that the bill would increase the number of uninsured Americans by 23 million in 2026, relative to Obamacare.

But the CBO’s projections are just that — projections. The agency can’t possibly consider all the possible outcomes for the insurance market, given the level of flexibility the AHCA grants the states. Further, the CBO’s previous estimates of Obamacare’s impact haven’t exactly proved true.

For starters, the AHCA authorizes all 50 states to request waivers from various provisions of Obamacare, such as its essential health benefits and age rating mandates, which forbid insurers from charging old people any more than three times what they charge the young.

But the CBO doesn’t know which states will seek waivers. The potential mix of waiver and nonwaiver states is virtually endless. Without knowing that mix, the agency has little hope of accurately predicting how the coverage figures will shake out.

Second, the CBO is overly optimistic about the current health of the marketplace. The agency claims that Obamacare’s panoply of subsidies and the individual mandate are enough to keep the market “stable in most areas.”

But rate increase requests already filed for next year in six states range from just under 7 percent to more than 50 percent. In one-third of counties nationwide, consumers have just one choice of insurer on Obamacare’s exchanges. Last year, more than 80 insurers left the exchanges.

That hardly sounds like a “stable” marketplace.

Finally, the CBO has historically struggled to predict how healthcare reform legislation will affect insurance coverage. In its 2010 report on Obamacare, the agency pegged exchange enrollment in 2017 at 25 million. Last year, it updated that estimate, guessing that 15 million people would sign up in 2017.

This year’s exchange enrollment tally? Just 12 million.

The Senate must not let the CBO’s latest estimates distract it from the very real double-digit premium hikes that millions of people are facing.

Sally Pipes (@sallypipes) is a contributor to the Washington Examiner’s Beltway Confidential blog. She is president, CEO and Thomas W. Smith fellow in healthcare policy at the Pacific Research Institute.

http://washex.am/2r1Fsdv

 

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