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Posted at 6:01 PM ET, 01/ 6/2011

Omnibus post on the 'gimmicks' in the CBO's score of the health-care law

By Ezra Klein

boehnercare.JPG

Whenever the health-care law and its CBO score comes back into the news, I get deluged with requests to respond to various Republican critiques of the bill's score. Earlier today, for instance, John asked:

Can you please respond to John Boehner and Paul Ryan's assertions that CBO was given incorrect assumptions when scoring the health care bill. Specifically cited as phony scoring is:

1) $115 billion implementation costs left out
2) Double counting of social security payroll taxes
3) Class Act premiums
4) Medicare Cuts
5) Doc Fix

Sure.

1) No, the $115 billion wasn't left out. The $115 billion isn't "implementation" but "discretionary spending." And most of that spending predates the bill. As CBO Director Doug Elmendorf said, "CBO’s discretionary baseline, which assumes that 2010 appropriations are extended with adjustments for anticipated inflation, already accounts for much of the potential discretionary spending under PPACA." The exact amount it already accounts for is $86 billion. What's left is optional spending: Congress can choose to appropriate those amounts in the future, but they don't have to. If they don't take further action, that money never gets spent. CBO report here. Longer post on the subject here.

2) CBO doesn't double count. You can read Paul Ryan admitting that CBO doesn't double count in this interview. Double counting is an accusation thrown at the administration's rhetoric: When they say the bill improves Medicare's solvency by X years, the equation beneath that statement is often using money that the CBO is counting toward deficit reduction. But the CBO, which doesn't make claims on Medicare's solvency, isn't double counting that money. So no, this has no bearing on their estimate. If you want to read more on this, head here.

3) CLASS Act premiums: The CLASS Act is a program to help disabled adults without putting them in nursing homes. According to the Congressional Budget Office, it will slightly reduce deficits in years 1 through 20, and then slightly increase them starting in the third decade. So you can argue that starting in 20 years, the CLASS Act is not fiscally responsible absent reforms. But in a world in which the health-care law is unchanged in 20 years, it's also going to save trillions of dollars in the third decade, wiping out the tens of billions CLASS is projected to cost. Here's FactCheck.org's article on the subject.

4) Medicare Cuts. Yes, there are a variety of cuts made to Medicare in the bill. But I'm amused to see it on my reader's list: The Medicare cuts are a big part of the reason the bill saves money. They're fiscally responsible in the extreme. But because they're unpopular, the GOP mentions them in the same breath as the bill's supposed fiscal irresponsibility. For the Republicans, the health-care law is both much too hot and -- brrr! -- much too cold.

5) The doc fix is not part of health-care reform. This is both the most unfair of the GOP's arguments, and the most annoying to rebut, as it's fairly complicated. But here's the short version: In 1997, the Republican Chairman of the Ways and Means Committee, Rep. Bill Thomas, added a provision to Medicare that cut doctor pay if growth exceeded a certain formula. The formula was flawed and the provision, which was expected to require modest cuts, suddenly began requiring huge cuts that would've sent doctors fleeing. So the Republican Congress began passing bills that kept the automatic cuts from going into place. When the Democrats took power, in 2006, they did the same thing. None of these bills were ever paid for, on either side.

The reason they were never paid for was that under the rules of the budget process, you would've had to find offsets for these hundreds of billions of dollars in cuts that you had never intended to make. And no one wanted to do that. Nor did anyone want to repeal the provision without offsets, because that would make them look fiscally irresponsible, as CBO's deficit estimates would rise sharply. So Congress kept passing one-year patches to SGR. When health-care reform was starting, House Democrats broached a permanent fix, but the GOP, in a sudden and opportunistic outbreak of fiscal responsibility, wouldn't let them undo the GOP's mistake unless they also offset the cost of the GOP's mistake. So House Democrats dropped it from health-care reform, because there was no need to add more problems and costs to the ones they were already dealing with.

Republicans then decided that this meant the doc fix was part of the cost of health-care reform, but this was transparently false: The problem predated the health-care reform bill, and needed to be fixed whether or not there was a health-care reform bill. The argument was the same as saying that America has $2.2 trillion in needed infrastructure upgrades, and those should be added to the cost of the bill. Incidentally, the GOP repeal bill doesn't include a word on the doc fix. If you follow their logic, this means that the cost of the doc fix should be added to their repeal bill, and in that case, their bill increases the deficit by $540 billion, not $240 billion. But they don't actually believe the argument they're making on this subject and neither do I, so I'm not going to try to get you to believe that. If you're a glutton for punishment and want to read more about this, head here.

6) Fine, the bill does pay for itself, but the parts that pay for the bill will never happen. John didn't mention this in his e-mail, but it's worth addressing in this post, as it comes up a lot. The argument goes like this: Sure, the bill does cut Medicare and cut other programs and raises taxes and impose cost controls such that it pays for itself if everything get implemented. But what's going to happen is that the spending will get implemented and the cost controls won't.

This is a very strange argument, and people rarely face up to its implications. If Congress can't implement cost controls or taxes or spending cuts, then the country goes bankrupt. Full stop. No other options save, maybe, hyperinflation. Otherwise, autopilot means insolvency. But most people don't really believe Congress can't get spending under control. Almost every prominent critic of the health-care law, for instance, is a big fan of Rep. Paul Ryan's Roadmap. But the Roadmap's savings begin much later than health-care reform's savings -- 2030 or so, as opposed to 2018 or so -- and they're much more radical and disruptive to the system. So you can argue that Congress is too feckless to ever do anything, but you can't argue that Congress is simply too feckless to do things that weren't your original preference. In that case, you're arguing that you don't like the bill by pretending you believe that America is headed towards an inevitable fiscal catastrophe and there's nothing anyone can do about it.

Photo credit: By Alex Brandon/Associated Press

By Ezra Klein  | January 6, 2011; 6:01 PM ET
Categories:  Health Reform  
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Comments

The next Republican tactic: Shoot the messenger. Abolish the CBO.

Posted by: jtmiller42 | January 6, 2011 6:27 PM | Report abuse

jtmiller42:
"The next Republican tactic: Shoot the messenger. Abolish the CBO."

The CBO said the new Capital Visitors Center would cost $70 million. It ended up costing over $600 million.

The point of criticizing CBO estimates is not to tarnish the CBO itself, but to highlight the fallacy of the rules they are required by law to operate under.

I'm a finance professional who does forecasting and planning for a living. If we used the CBO fantasy methodology in our business, investors would laugh at us.

Posted by: dbw1 | January 6, 2011 6:41 PM | Report abuse

Excellent post. I think you may have stumped the critics, not many comments yet.

Posted by: DeanofProgress | January 6, 2011 6:41 PM | Report abuse

Ezra, I read the Ryan interview.

He is right on the double counting, and you are wrong. It's a preposterous and implausible sleight-of-hand, and laughable on the face of it.

Posted by: karl-keller | January 6, 2011 7:06 PM | Report abuse

Karl

Don't be such an idiot.

Ryan is a liar and is caught red handed.

Posted by: lauren2010 | January 6, 2011 7:17 PM | Report abuse

DeanofProgress:
"Excellent post. I think you may have stumped the critics, not many comments yet."

Actually, Ezra is just regurgating the talking points he's been trying to hold to for months. Keep in mind, Ezra is a poly-sci major, not an economist. I've seen this $115B debated elsewhere, and I take the side that it (or most of it, and more not yet known) was NOT in the bill. I believe the quote in an AP article I read at the time said that in addition to the $115b, "costs could run much higher as there are many items authorized but not funded".

The point is, Ezra as a liberal-progressive will claim all day long that the adminstrative spending left out of the CBO score doesn't count...because he has to, otherwise everyone will start to realize how expensive this will be if implemented as they intended.

One final smaller but real item Ezra fails to address, although I've mentioned it several times on his message boards: beyond all the points Ezra refutes above that were posted by Paul Ryan's group, the Obama administrations own experts reported in May last year (two months after the ACA passed) that the spending for the temporary high-risk pools would likely run $5 billion PER YEAR through 2014; the ACA only included $5 billion. That's another $15 billion dollar miss by the "CBO score", and it occurred within two months of the bill's passage on one of the nearest-term (and presumably, less risky to forecast-miss) components.

So, how much faith are you willing to put in the Democrats/CBO 'score' for the ACA over the next 10 years when the most expensive parts are still way out there, and they have already missed badly on some of the small near-term elements that should have been known with a fair amount of certainty? Do you think they are that inept, or that deceitful in their 'scoring'?

Neither choice is very comforting, is it....

Posted by: dbw1 | January 6, 2011 7:21 PM | Report abuse

DBw

The CBO already scored all variables and you are wrong.

You are just a dumb armchair neocon who is in denial.

I hope you stop whining so I can get some sleep to night

Posted by: lauren2010 | January 6, 2011 7:34 PM | Report abuse

"CBO’s responsibility to the Congress is to estimate the effects of proposals as written and not to forecast future legislation. However, current law now includes a number of policies that might be difficult to sustain over a long period of time."

And the GOP now says "see, Obamacare doesn't work!"

But that is like predicting someone is going to have pain in their face right before you slug them. The reason that these "policies... might be difficult to sustain over a long period of time" is because Congress could possibly repeal money saving provisions or other parts of the current law.

Dems are guilty of this too, but -- Dear GOP -- it is hard to cry "foul" when you are performing a moving pick.


@Chris_Gaun
chrisgaun@gmail.com

Posted by: chrisgaun | January 6, 2011 7:37 PM | Report abuse

In 2009 when the CBO came out with a report that "original" health bill (not the one passed) would trigger a 1.5 trillion dollar deficit the GOP was all over the thing, waving it around as solid proof that the health reform was bad for America.....

Now the accused they CBO of being "liberal" and/or making errors and begin FUD-ing all over the place.

What a bunch of evil little weasels these yokels are....The whole lot of them.

Posted by: Mighty7 | January 6, 2011 7:43 PM | Report abuse

Ezra, I read the Ryan interview.

He is right on the double counting, and you are wrong. It's a preposterous and implausible sleight-of-hand, and laughable on the face of it.

Posted by: karl-kelle
__

Then prove it rather than merely claim it.

Posted by: rich_in_nj | January 6, 2011 8:40 PM | Report abuse

A complete whiff on the CLASS Act. The excess early premiums from the CLASS Act need to be reserved for future benefit payments. The CLASS Act on it's own does not reduce the deficit, it is priced to be break-even. The timing of the inflows and outflows is irrelevant, the simple fact is that you cannot spend that money elsewhere and claim fiscal responsibility. It is beyond silly to pretend that the timing of CLASS Act payments improves our fiscal situation.

And you've missed the real problem with Social Security. The issue is not double counting, but similar to the CLASS Act they are spending money that is already accounted for. The additional SS taxes people will pay as employers substitute salary for insurance entitles those people to additional SS benefits in the future.

Both of those things create the illusion of deficit reduction because they are using cash accounting (as well as unified budget accounting). But you cannot say with a straight face that either of those things actually improve the fiscal health of the country. Both of them are budget neutral, as is PPACA.

Posted by: ab13 | January 6, 2011 8:51 PM | Report abuse

A thought experiment to illustrate the lunacy of claiming the CLASS Act reduces the deficit. Just imagine it were passed on its own, not attached to PPACA. Pretty tame piece of legislation, just creates a new insurance program designed to break even and not cost us any money. Now imagine that one party wanted to repeal it. Would anyone take seriously the argument that repealing it would increase the deficit, simply because in the early years it takes in more money than goes out? Of course not, because in doing so they'd effectively be saying "You can't get rid of this deficit-neutral legislation because it will hurt the deficit!" They would rightfully be called morons for making such an argument. Yet here we are, with people claiming that we cannot get rid of PPACA because losing out on those CLASS Act premiums will increase the deficit.

Posted by: ab13 | January 6, 2011 9:01 PM | Report abuse

i love the premise that there's not a lot of commenters on a post after 6 pm so Ezra must be right. If a tree falls in the woods I guess it doesn't make a sound.


Onto the errors or at least faulty premises. As far as the doc fix its like Republicans arguing that we were already in a war so we don't have to include the funding that that goes towards when calculating its effect on the deficit. Faulty math again.

Onto the CLASS Act (great points by ab13 btw) but I'll add that like Medicare and SS there is no age limitation to it so let's assume that I pay these voluntary premiums into it starting at age 40 at say $2000 a year for 20 years. That's $80,000 or round it up for interest earned or whatever to $100k. If I need the services at age 65 then at $50 a day I get basically 5 years of services at most. Then at age 70 what happens? WHO PAYS??? Do they just cut me off? I doubt it. Say I live to 85 and they continued to pay the same $20k per year (again not including COLA increases which I'm sure are in there) and you have typical Democrat faulty math. So now little old me is $300k in the red. And that's just me alone. And in fact CBO estimates that it'll start at $75 per day which only makes the figures above look WAY WORSE. Maybe $500k in the hole in my instance when you factor in COLA etc.

The legislation also states that the HHS Secretary will "develop premiums and benefits that are actuarially sound."

Does anybody belive that Sebelius knows what actuarily sound means???


I tell you what Ezra, you GUARANTEE me that you'll cut me off after i've reached in payouts the amounts that I've paid in and I'd be fine with it but again we know that won't be the case don't we.

Posted by: visionbrkr | January 6, 2011 9:35 PM | Report abuse

Sen. Paul Ryan just stated the Republicans had the CBO score the health care bill not including the accounting gimmicks. It came back with a cost at 700 billion over 10 years. Can you explain this? He's lying won't sell me.

Posted by: briandayna | January 6, 2011 10:33 PM | Report abuse

visionbrkr, you are wrong. The war and the doc fix are not analogous. If you were trying to compute the whole deficit, obviously you would have to include the war and the doc fix. But if you are just computing the deficit caused by healthcare reform, that is (by definition) the amount of spending increases/tax decreases, minus the amount of spending decreases/tax increases.

That's it. If you argue otherwise, you are wrong by definition. The doc fix does not contribute to the bill anymore than the bush tax cuts contribute to the bill, or the unemployment extensions contribute to the bill.

Posted by: JonShields1 | January 6, 2011 11:02 PM | Report abuse

briandayna, if you asked the CBO to ask what how the healthcare bill would affect the deficit if the stimulus bill were added to it, the CBO would respond that it would increase the deficit by hundreds of billions (like clockwork).

That doesn't mean it makes any sense to calculate the deficit impact of the healthcare bill with the stimulus included. Likewise, it does not make any sense to include the doc fix. The doc fix has to be made each year whether or not we pass healthcare reform, just like unemployment is extended and the AMT patch is passed. None of these are part of the healthcare bill.

Posted by: JonShields1 | January 6, 2011 11:07 PM | Report abuse

In three months, the Obama/Pelosi Regime will reveal the actual cost of the PPACA to date. [The cost figures are, according to Washington Post reports, currently hidden from public examination.]

If, when the collected data are finally released, we see that the actual cost of the PPACA is more than 400% above CBO estimates, what then? How will Obama/Pelosi groupies explain the cost overrun?

My hunch is that Jon Gruber's model will become a scapegoat: the Obama/Pelosi Regime itself wasn't wrong and didn't mislead the nation -- the bad old well-trained economist just provided flawed models and the poor Regime just took him at his work and was duped. Any bets??

Posted by: rmgregory | January 7, 2011 12:10 AM | Report abuse

Ezra, I think you should also mention that the CBO didn't try to score many of the cost-saving provisions of the bill whose effects were deemed too difficult to predict. I've heard from many health-policy experts who expect the actual savings to be considerably higher.

Posted by: ChicagoMike | January 7, 2011 12:30 AM | Report abuse


If you currently have pre-existing conditions like me that have prevented you from being able to qualify for health insurance for at least six months you will have coverage options under new health care. Check "Wise Health Insurance" to find how to get quality insurance for dollars.

Posted by: keithrybicki | January 7, 2011 1:09 AM | Report abuse

I'd like to see Ezra respond to John Cassidy's article in the New Yorker about the CBO underestimating the effect of the subsidies in causing companies to dump their existing coverage in favor of the subsidized exchanges, thus eroding the "firewall" between the exchanges and the existing employer based model and increasing the costs to the Federal Government.

"The question of what impact the reforms will have on existing insurance plans has received even less analysis. According to President Obama, if you have coverage you like you can keep it, and that’s that. For the majority of workers, this will undoubtedly be true, at least in the short term, but in some parts of the economy, particularly industries that pay low and moderate wages, the presence of such generous subsidies for individual coverage is bound to affect behavior eventually. To suggest this won’t happen is to say economic incentives don’t matter.

Take a medium-sized firm that employs a hundred people earning $40,000 each—a private security firm based in Atlanta, say—and currently offers them health-care insurance worth $10,000 a year, of which the employees pay $2,500. This employer’s annual health-care costs are $750,000 (a hundred times $7,500). In the reformed system, the firm’s workers, if they didn’t have insurance, would be eligible for generous subsidies to buy private insurance. For example, a married forty-year-old security guard whose wife stayed home to raise two kids could enroll in a non-group plan for less than $1,400 a year, according to the Kaiser Health Reform Subsidy Calculator. (The subsidy from the government would be $8,058.)

In a situation like this, the firm has a strong financial incentive to junk its group coverage and dump its workers onto the taxpayer-subsidized plan. Under the new law, firms with more than fifty workers that don’t offer coverage would have to pay an annual fine of $2,000 for every worker they employ, excepting the first thirty. In this case, the security firm would incur a fine of $140,000 (seventy times two), but it would save $610,000 a year on health-care costs. If you owned this firm, what would you do? Unless you are unusually public spirited, you would take advantage of the free money that the government is giving out. Since your employees would see their own health-care contributions fall by more than $1,100 a year, or almost half, they would be unlikely to complain. And even if they did, you would be saving so much money you afford to buy their agreement with a pay raise of, say, $2,000 a year, and still come out well ahead."

"The designers of health-care reform and the C.B.O. are aware of this problem, but, in my view, they have greatly underestimated it."

http://www.newyorker.com/online/blogs/johncassidy/2010/03/obamacare-by-the-numbers-part-1.html

http://www.newyorker.com/online/blogs/johncassidy/2010/03/obamacare-by-the-numbers-part-2.html

Posted by: jnc4p | January 7, 2011 1:13 AM | Report abuse

Nice Article. I just now got Coupons of my Favorite Brands at "Printapons" search online and start saving now

Posted by: cecilymoris7 | January 7, 2011 2:59 AM | Report abuse

"If Congress can't implement cost controls or taxes or spending cuts, then the country goes bankrupt." FINALLY. After a response that is built on 'what ifs', garbage in, garbage out ... the CBO adds it's OWN disclaimer ... to cover the previous sprinkling of faery dust. This untenable boondoogle will definitely have to be ruled unconstitutional by SCOTUS.

Posted by: IQ168 | January 7, 2011 8:11 AM | Report abuse

The best gimmick of all that you do not address Mr. Klein is the 10 years of revenues(taxes fees etc) for the health care but only 6 years of expenditures. Now I would be a happy camper if I could produce my personal future financials based on that gimmick used by PPACA and scored by the CBO with no corrections or notations on same. If I reported financial statements like that for a company, the company would be accused of fraud and I would lose my license.

Posted by: Liberty4all2 | January 7, 2011 9:50 AM | Report abuse

One thing the opponents of the bill always say is that the CBO only scores "based on the information it is given" as though it just accepts a data handout by the Administration. But don't they study the bill and other information. To accept that logic would mean that no scoring on any bill could be relied on.

Posted by: famattjr | January 7, 2011 10:05 AM | Report abuse

does our speaker, uber Catholic, only tell us little lies -is he just a venial sinner competing with those Big Sin guys -The Family values, born-again fornicators claiming authority from Jesus, Madison, Hamilton, to dismantle the social safety net - they read it in the Constitution - Legislate for billionaires who gave us money - turn a blind eye to the lame and the halt - It's only a deficit if people get health care - NOT if a donor buys a new yacht

Posted by: winchestereast | January 7, 2011 10:13 AM | Report abuse

visionbrkr: "As far as the doc fix its like Republicans arguing that we were already in a war so we don't have to include the funding that that goes towards when calculating its effect on the deficit."

The issue isn't whether the doc fix has an effect on the deficit; it's whether it's a part of the health care reform law and should be "scored" with it.

The doc fix deals with compensating doctors for Medicare patients, and that issue doesn't change regardless of the status of the health care reform law. Even if the health care reform is fully repealed, there will still be the problem of the doc fix. Consequently, it's wrong to include the "costs" of the doc fix with the projected savings of health care reform, since one is not dependent on the other.

I could say that the home mortgage interest deduction adds to the deficit, and so may some government-sponsored mortgage modification program, but just because they both have to do with mortgages doesn't mean they should be scored together. They are different programs and their effects on the budget should be evaluated as such.

Posted by: dasimon | January 7, 2011 10:33 AM | Report abuse

Mr. Klein,

You might want to read that interview transcript again. It was YOU that agreed that double counting was "out of line". It was Rep. Paul Ryan that agreed that CBO is an unbiased entity, not that the double counting was appropriate.


"EK: This is where I think we end up in different places. The philosophical differences are all fair enough. But insofar as the double counting goes, the double counting is an issue of how some Democrats are talking about this. And I agree with you. Saying that the money will do two things at once is out of line. But what I want to make sure is clarified here is that the numbers people are using from CBO are not afflicted by that rhetorical overreach. When CBO says the bill will save this much money, it really will, at least according to the best estimates.

PR: I'm not disagreeing with that. But I think CBO is omitting other fiscal effects that are not in the bill -- unless we plan on cutting doctors 21 percent next month. Unless we plan on doing that, then we're not truly capturing the fiscal effects."

Posted by: cprferry | January 7, 2011 10:53 AM | Report abuse

Ezra, this is when you are at your best. Good job.

Like I said on my blog. If doc fix and ACA are so intertwined then they both have to be included on the GOP's bill to repeal. But, of course, Republicans don't want it scored on their bill. Mainly because they don't even believe their own lies. But mostly they just want to be able to add costly items to Dem bills to create huge conspiracy theories without applying the same to theirs.

This is usually called hypocrisy but when it's this prevalent it's called go suck a cock Repubs.

http://www.thefoldblog.com/2011/01/cbo-scores-repeal-effort-makes-john.html

Posted by: Chris-TheFold | January 7, 2011 11:13 AM | Report abuse

Mr. Klein,

Again your own words betray you. In your interview with Rep. Paul Ryan you admitted that the CBO score was gamed by removing the doc fix. It made the numbers look bad, and the Democrats couldn't handle that PR debacle.

Now one year later to continue to hold on the claim of the bill reducing the deficit is intellectually dishonest and extremely partisan. The claims of Democrats have nothing to do with with the facts, but only good PR.

On what the SGR payments mean for the bill. It means that under PPACA payments were expected to pay say $3. However, under realistic expectations it would have been $5. The bill's expectations, which the Democrats restricted CBO from scoring in the official report, are not realistic and claim artificially low expenditures.

"PR: You and I both know why they took it out. It made the numbers look bad.

EK: Absolutely"

Posted by: cprferry | January 7, 2011 11:14 AM | Report abuse

"Likewise, it does not make any sense to include the doc fix. The doc fix has to be made each year whether or not we pass healthcare reform, just like unemployment is extended and the AMT patch is passed. None of these are part of the healthcare bill.

Posted by: JonShields1"

So what you're saying is that the doc fix is a reasonable expectation to make and should represent the baseline when the CBO or politician assumes Medicare expenditures?

But alas that's what the PPACA did not do. It assumed the lower, unrealistic payments rates.

Posted by: cprferry | January 7, 2011 11:21 AM | Report abuse

As a retired business owner my business sense has convinced me that the cheapest, most cost-effic­ient way of providing health care to 100% of our people is a Medicare-f­or-all system that will be paid for with the eliminatio­n of $800 billion in insurance bureaucrac­y administra­tive waste. In the process we will cut costs by $400 billion, or optionally­, spend that $400 billion on expanding Medicare to include eye and dental care.

The mere fact that it cost the industry $125 million in political bribes to keep it off the table should convince conservati­ves that it was the right thing to do. If it had been the wrong thing it would have not cost bribes at all; killing it would have been free.

And that should set off other alarms in our heads; we have a corrupt political system that -- despite what John Boehner says -- is owned by corporate interests. We DO NOT have a "People's House."

Jack Lohman
http://Mon­eyedPoliti­cians.net

Posted by: jelohman | January 7, 2011 11:46 AM | Report abuse

"Sen. Paul Ryan just stated the Republicans had the CBO score the health care bill not including the accounting gimmicks. It came back with a cost at 700 billion over 10 years. Can you explain this? He's lying won't sell me.
Posted by: briandayna"

See the report for yourself.
http://thehill.com/images/stories/blogs/flooraction/Jan2011/housebudget.pdf

Posted by: cprferry | January 7, 2011 11:59 AM | Report abuse

cprferry: "But alas that's what the PPACA did not do. It assumed the lower, unrealistic payments rates."

But I don't think it matters which rate one assumes for purpose of comparing the effect of ACA repeal. Pick the lower rate of reimbursement as the baseline, and compare the effect of the deficit with and without the ACA, and if what you say is correct then the CBO says repeal will add to the deficit. But if one assumes the higher reimbursement rate, the effect of repeal will (I believe) still increase the deficit. So with or without the doc fix, ACA repeal will increase the deficit. I don't think it matters which baseline you pick, as long as it's consistent for both analyses.

Posted by: dasimon | January 7, 2011 1:43 PM | Report abuse

Dasimon, PPACA only appears to reduce the deficit because the lower rates. Applying the more realistic rates PPACA increases the deficit. Thus whether its repeal adds or subtracts from the deficit is dependent on the assumptions made to calculate PPACA. Mr. Ezra Klein has admitted that the reason why the lower rates replaced the initially selected realistic rates was to make the bill look good.

Posted by: cprferry | January 7, 2011 2:50 PM | Report abuse

I think the first order of business for this Congress should be passing a rule that a normal high school graduate can read and understand every law in the country and every regulation derived from that law.

Why does it all have to be so complicated? I am a college graduate and it boggles my mind. No wonder so many Americans rely on ideology to make up their minds. They can't understand the laws of their own country!

ARGH!!!

Posted by: shayladane | January 7, 2011 3:16 PM | Report abuse

I think the first order of business for this Congress should be passing a rule that a normal high school graduate can read and understand every law in the country and every regulation derived from that law.

Why does it all have to be so complicated? I am a college graduate and it boggles my mind. No wonder so many Americans rely on ideology to make up their minds. They can't understand the laws of their own country!

ARGH!!!

Posted by: shayladane | January 7, 2011 3:18 PM | Report abuse

"Applying the more realistic rates PPACA increases the deficit."

But is that the proper comparison? I'd think you'd want to compare the "more realistic rates" with the PPACA versus the "more realistic rates" without the PPACA. Has that been scored?

What Ryan got, to my understanding, was the doc fix with the PPACA; but I haven't seen any analysis of the doc fix without the PPACA. You have to start with the same baseline to have a valid and consistent basis of comparison as to the effect of the PPACA. Do you have a cite?

As Jonathan Chait says, http://www.tnr.com/blog/jonathan-chait/the-doc-fix-myth: "a member of Congress asked the CBO to add up the combined budgetary sum of the health care bill (HR 3590) plus the reconciliation fixes (HR 4872) and then throw in the doc fix. This hardly constitutes an endorsement of Ryan's claim that the doc fix is part of the cost of enacting Obamacare. If Ryan asked CBO to add in the cost of continuing the Iraq war, it would have done that, too....

"Democrats did not instruct the CBO to credit savings from reducing physician pay toward the health care bill. Every dollar of new health care spending is offset by different savings. The purported cut in physician pay is not part of those savings."

Again, if you have a comparison of the cost of the doc fix with the cost of the doc fix + the ACA, please send it along. But just saying the doc fix + the ACA increases the deficit doesn't tell us about whether the ACA itself makes the situation worse or better.

Posted by: dasimon | January 7, 2011 3:19 PM | Report abuse

It does if PPACA relies on unrealistic low rates uncorrected by the doc fix. The expenditures in the bill are taken before applying the doc fix and report reduced expenditures. The original House bill applied the expenditures based on the realistic rates of the doc fix then removed it and applied the unrealistic rates only to make the bill look better.

And to make it look even better they threw in a biofuel tax revision and applied its deficit savings. BIOFUEL TAXES! Nothing to do with health care, and once part of stand alone legislation. The CBO score was gamed.

Posted by: cprferry | January 7, 2011 3:47 PM | Report abuse

cprferry, you still haven't provided the relevant comparison. The reimbursement rates will be whatever they will be, regardless of whether the ACA was passed or if it's repealed.

You seem to claim that with the doc fix, the ACA will make the deficit worse than without the ACA. But you still have not provided any source for that claim. So how do you know that your claim is true?

Again, I'm asking only that the baseline be consistent. Just saying (for the sake of argument) that the revised House bill was without the doc fix to make the bill look better does not answer the relevant question: if the doc fix is continued, is the deficit lower with the ACA than without it?

(Also, you refer to the House bill, which we know is not the bill that was passed and so may not apply to the subject of this discussion.)

And again, if you've got a source for your claim, please provide it. We can compare no-doc-fix with no-doc-fix plus ACA, and we can compare doc fix with doc fix plus ACA, but we shouldn't compare no doc fix with doc fix plus ACA--at least if we're interested in the effect of the ACA.

Posted by: dasimon | January 7, 2011 6:15 PM | Report abuse

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