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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.

By Ezra Klein  |  June 15, 2009; 11:59 PM ET
Categories:  Health Reform  
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Comments

Obama's health-care plan has more to do with paying off political debts than helping Americans with health care.

In one way it is a godsend for the Republicans. If it is passed, once the public discovers how their Democratic politicians have betrayed them, they will revolt, and the Democrats will certainly loose control of Congress.

Posted by: mike85 | June 16, 2009 12:48 AM | Report abuse

So the bill that Democrats in Congress are crafting does not have a strong employer or individual mandate and lacks a public plan, all of which the CBO took into account, but the Dems are nonetheless pressing ahead by saying that the CBO's estimates do not reflect the actual bill that they intend to offer.

So what is this magical bill that they intend to offer that lacks the employer and individual mandates and the public option, yet achieves universal coverage?

Sounds to me like this bill is dead on arrival given the CBO estimates. Congress either needs to do more or else do nothing at all because blowing a trillion dollars to pay for the health care of 16 million people is absurd.

Or, wait, strike that. If the government will pay me $62,500 per person to insure people, I will gladly set up an insurance company or HMO to handle the task.

There are an estimated 46 million people without health insurance in this country. Many more are underinsured. Why bother will a bill that is going to barely scratch the surface in solving the problem, and that will do absolutely nothing to rein in the spiraling costs of health care?

Posted by: blert | June 16, 2009 1:56 AM | Report abuse

Part of this whole process requires us "the public" to make an assumption that the politicians and their staff actually have knowledge of the subject of Health Reform and are trying to pull together legislation that will make things better when they are finished.

Given the results of the CBO scoring it makes me wonder if these people have a clue about what they are doing ... this is getting scary.

Posted by: cautious | June 16, 2009 4:22 AM | Report abuse

What's scary is submitting a bill without details.

In a general sense, we all agree that there should be changes in health care. The devil will truly be in the details. That's where any points of contention will be.

So what's the point of submitting a bill for review without details? It's tantamount to writing a blank check, and pretty much pointless.

The CBO is just doing their job. The Democrats need to take the time necessary to get this right, not speed it along in a sloppy fashion just to get it done quickly.

Are they trying to do the right thing, or are they just playing politics? I hope they take their time and get it right.

Posted by: postfan1 | June 16, 2009 4:47 AM | Report abuse

EXCUSES, EXCUSES

One more more laugh-fest from those trying to con TAXPAYERS that Obama-care won't be FANNIE/FREDDIE. Who keep failing badly.

Someone with authentic work experience would recognize this as: "OMG! YOU DID WHAT I TOLD YOU TO DO! OMG!"

Yeah, yeah -- the CBO is biased toward non-Democrats. And Obama has two decades of executive-level work experience.

To the Obama con-artists who claim socialism/public plan would be "competitive" -- a great oxymoron -- gee, then let's privatize ALL non-military government functions.

Just declare the federal government bankrupt -- it is -- and make all the workers re-apply for their jobs. Get rid of all the DEADWOOD.

Posted by: russpoter | June 16, 2009 6:59 AM | Report abuse

I fear you may be missing the point slightly, Bert: The bill will have an employer and individual mandate. That's the difference.

Posted by: Ezra Klein | June 16, 2009 7:11 AM | Report abuse

I'm pretty shocked that the CBO do not submit two sets of numbers. One with how the bill is currently (with big holes) and one with how the bill would look when those holes are filled in the manner that the chairman of the HELP committee had indicated to them.

Posted by: JonWa | June 16, 2009 7:12 AM | Report abuse

Will the CBO be asked to score HR676?

Posted by: lensch | June 16, 2009 7:49 AM | Report abuse

you know my mother once told me that its better to take small bites than swallow your food or you'll get sick.

Maybe Mr Obama needs to heed this advice. Go for what you can get most all to agree on or enough to get it passed.

1-an individual and employer mandate which will be traded off for an end to pre-existing conditions.

2-co-op plans for those most vulnerable with LITTLE GOVERNMENT INVOLVEMENT strictly set by law. Those most vulnerable? Individual 1099 type ee's, sole proprietors and companies with 2-5 employees that are struggling the most with this.

His dreams of single payer will have to wait until we can afford them.

I wonder how his agenda is going over in Michigan where there's 12.5% unemployment and the thought of new taxes has to be completely disgusting to him now that he's sold off the car industry to the UAW with parts of GM scattered all over the world like a train wreck.

Posted by: visionbrkr | June 16, 2009 7:52 AM | Report abuse

and the thought of covering EVERYTHING with no limits is literally stupid. How can you give the foxes (ie physical therapists and other providers of ongoing types of treatments) the key to the henhouse and not expect it to cost us dearly. At some point when a treatment doesn't work, an alternate treatment plan has to be addressed but while they're still being paid in full, what incentives do they have to do so?

Posted by: visionbrkr | June 16, 2009 7:54 AM | Report abuse

If I were in the CBO, and the updated Bill differed significantly from the first discussions surrounding it, I too would assume that those differences were deliberate. I don't think they did anything wrong here - the blame is on whoever thought it was a good idea to get a massively incomplete bill scored.

Posted by: Drew_Miller_Hates_IDs_That_Dont_Allow_Spaces | June 16, 2009 9:38 AM | Report abuse

Good work, CBO. Reading the draft bill literally, and thus forcing HELP to resubmit a new bill that actually says what they want the final HELP bill to say, will result in the public having two cost estimates instead of one -- one for a weak bill and one for a strong bill. For those of us whose ideal health care bill is "whatever works, regardless of ideology", this second estimate will provide valuable contrasting data.

Posted by: tomveiltomveil | June 16, 2009 9:39 AM | Report abuse

EK: "The bill will have an employer and individual mandate."

This doesn't mean that it will be any cheaper. It just means that a chunk of that trillion will come directly from our pockets, as well as whatever we pay through taxes. We'll be paying a trillion dollars via one mechanism or another.

Posted by: tomtildrum | June 16, 2009 9:46 AM | Report abuse

Exact as ‘tomveiltomveil’ said - good work CBO. Why in the world CBO read minds of Congress people than the actual Bill? Who are we kidding here?

Ezra, go to bank and submit your business plan for a business loan. What do you expect the bank or auditor (CBO as futuristic auditor in this case) to read? Your mind or what is on the paper? Our beloved President also kicked out GM CEO Wagnor based on his faulty ‘get well plan’ on the paper. President read the paper and decided. Same with CBO - it read the bill and gave its comments. What is incorrect there? If Dems left out crucial details to please GOP (or any other constituencies / lobbyists) then that is what is exactly going to happen in the end – total mess of Trillion Dollar.

I mean we have one small sliver of an agency (CBO) which is trying to do its job in this cacophony of health care reforms when essentially Dems are on ‘mass suicide’; why blame CBO? CBO should be congratulated here.

Sad truth is the way current health care reforms are planned by Dems and President, despite constant mantra of containing costs, we are on our way to waste money while increasing the debt. Essentially Dems are screwing this whole thing.

Posted by: umesh409 | June 16, 2009 10:10 AM | Report abuse

As an employer of 20 people (and I pay 100 percent for them to have a good health care plan, with Kaiser, no deductible, excellent preventative care) and "too large" to be exempt under what I see proposed, I have a dream: What if I could cancel my direct payments to my health insurance broker, my worker's comp plan, and lower my payments for auto and liability insurance because they wouldn't have to include medical, and what if I wouldn't have to spend days each year choosing a plan, explaining it to my employees, and time each month doing the accounting connected, and I could just pay all that money directly to taxes that would go to health care for everyone! And what if my competitors had to pay a similar amount in taxes? What a boon! And what a boon to my employees, who would get their families covered -- something I can't afford.

If I didn't have a tax bill that equaled what I pay now, I could actually afford to give raises to my employees. And I suppose if employees were paying part of their income taxes toward health care, then my taxes would go down.

We pay so much now for health care. Health care is very highly rationed. Some people get none (except through emergency rooms) and most others with insurance have heavy restrictions on the amount and kind they receive.

Although I don't think that health care should be going through employers, I could settle for something where I had a SMALL group of highly regulated non-profit insurance companies that would be offering full service plans without restrictions. I could make my choice on the service they offered. The plans should cost the same. The downside for my employees would be that they might be forced to change if they left my company.

I think the American public, for the most part, wants what I want, and I think most of them understand what I understand. It is our legislature and our administration, big beneficiaries of the largesse of big-med, who do not want it.

Sharon Toji
Irvine CA

Posted by: SharonToji | June 16, 2009 10:11 AM | Report abuse

The Washington Post and ABC News media conglomerate is in full propaganda mode today. Obscuring the truth, using censorship and lies to push the president's agenda. Notice that Washington Post refuses to cover the Americorp IG Obama fired illegally? Or that Dick Durbin's insider trading scandal? No, they bash the CBO, which they loved unconditionally during the Bush Administration.

Ezra Klein is being linked to all over the web as another Obamanut. Is there any objective journalist left at the Washington Post, or are the all still in Wasilla looking for Trig's birth certificate?

Posted by: Cornell1984 | June 16, 2009 10:33 AM | Report abuse

Thanks to the commenters who concentrated on the substance of this story: CBO's scoring and what's been submitted to them to score. Most of the rest of the comments were the usual right wing attempt to trivialize the debate, attack Obama, and call names: "socialist," buying off voters, etc. I guess it's too much to ask them to either defend the current health care "system" (good luck on that) or offer serious alternatives that helps most Americans get access to decent coverage at reasonable prices.

Posted by: tmginnova | June 16, 2009 2:37 PM | Report abuse

The comments to this entry are closed.

 
 
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