The CBO's Assumptions
Yesterday, the Congressional Budget Office returned a fairly devastating estimate of Sens. Ted Kennedy (D-Mass.) and Chris Dodd's (D-Conn.) Affordable Health Choices Act. According to the agency, the bill would cost a hefty trillion dollars over 10 years and extend insurance to a mere 16 million people. That's a lot of money to spend if you're only going to achieve a third of your goal. Frankly, I was pretty surprised by the results.
And so, it turns out, were the people writing the bill.
A couple of months ago, the Health, Education, Labor, and Pensions Committee sent the CBO a sketch of a draft of its legislation. And the CBO sent the members back a stab at an outline of an estimate. It was all very early, and very rough. But CBO's response was encouraging. The total cost was a bit higher, but the number covered was much higher. More like what you'd expect. More like what health reform is trying to achieve.
The draft the CBO examined last week, however, was in certain respects even less complete than the outline they were given months ago. In an effort to buy some extra time to negotiate with Republicans on the committee, the Democrats on HELP left out some of the more controversial policies in the hopes of reaching a bipartisan agreement sometime this week. The public plan, the employer mandate and the individual mandate were all absent from the proposal the CBO examined. The employer and individual mandates -- the first of which pushes employers to offer coverage and the second of which force individuals to purchase coverage -- are particularly key to increasing the number of Americans with health insurance.
You might ask what the HELP Committee was thinking, sending Swiss cheese legislation to CBO. Well, the HELP Committee's expectation was that the CBO, in crafting its preliminary score, would assume something similar to the outline it had seen months before. The CBO didn't. In fact, it did the opposite. CBO ran its estimates with no employer mandate and an individual mandate with a laughably small penalty.
Members of HELP were thus shocked by yesterday's score. The specific provisions of the bill that the CBO examined did not look like the bill HELP intends to write. Which means that the numbers aren't correct. If HELP is writing a bill with a strong employer and individual mandate, and CBO scores a bill with no employer mandate and a weak individual mandate, that's not a useful estimate.
By Monday night, members of the HELP Committee were scrambling to give the CBO something closer to the final legislation to examine -- this time including rough details of the employer mandate and the individual mandate. They're hoping to have a new set of estimates by Friday, though that's probably ambitious. Either way, I wouldn't put too much stock in these numbers.
June 15, 2009; 11:59 PM ET
Categories: Health Reform
Save & Share: Previous: Tab Dump
Next: Your World in Charts: Current Account Balances Galore Edition
Posted by: mike85 | June 16, 2009 12:48 AM | Report abuse
Posted by: blert | June 16, 2009 1:56 AM | Report abuse
Posted by: cautious | June 16, 2009 4:22 AM | Report abuse
Posted by: postfan1 | June 16, 2009 4:47 AM | Report abuse
Posted by: russpoter | June 16, 2009 6:59 AM | Report abuse
Posted by: Ezra Klein | June 16, 2009 7:11 AM | Report abuse
Posted by: JonWa | June 16, 2009 7:12 AM | Report abuse
Posted by: lensch | June 16, 2009 7:49 AM | Report abuse
Posted by: visionbrkr | June 16, 2009 7:52 AM | Report abuse
Posted by: visionbrkr | June 16, 2009 7:54 AM | Report abuse
Posted by: Drew_Miller_Hates_IDs_That_Dont_Allow_Spaces | June 16, 2009 9:38 AM | Report abuse
Posted by: tomveiltomveil | June 16, 2009 9:39 AM | Report abuse
Posted by: tomtildrum | June 16, 2009 9:46 AM | Report abuse
Posted by: umesh409 | June 16, 2009 10:10 AM | Report abuse
Posted by: SharonToji | June 16, 2009 10:11 AM | Report abuse
Posted by: Cornell1984 | June 16, 2009 10:33 AM | Report abuse
Posted by: tmginnova | June 16, 2009 2:37 PM | Report abuse
The comments to this entry are closed.