The Bad News from the CBO Report

Enthusiasm for the Congressional Budget Office report obscures some pitfalls

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Despite fears about the cost of health care reform, a report by the Congressional Budget Office says Sen. Baucus's health care bill will actually reduce the deficit. This could finally clear the way for broader support and securing reform, but there are some lingering concerns. Recall that Baucus's plan is not particularly beloved, especially among liberals who want broader coverage and balk at a tax increases on the middle class. Also, according to the CBO, the bill would leave 25 million non-elderly residents uninsured, about a third of whom would be unauthorized immigrants. There's lots of good news, but serious concerns remain.

  • Score Includes Drop in Services 2015-2018 Ezra Klein finds a nasty provision. "In the aggregate, the Senate finance bill reduces the deficit. But there are a couple individual years when it increases it. The CBO thus estimates that 'the failsafe provisions would require a reduction in exchange subsidies averaging about 15 percent during the years 2015 through 2018.' That's a very bad thing, particularly in the first years of the plan. It means that, with no warning, subsidies will be cut by 15 percent, and insurance that families were able to afford the year before will become totally unaffordable. That needs to be changed."
  • CBO Score Too Optimistic? Megan McArdle doesn't buy the CBO's report. "Going by the fairly sketchy description, virtually all of the extra benefit appears to come from estimating that employers will see their health care costs fall, mostly because they put those workers into federally subsidized programs, pass the resulting savings along to their workers in the form of higher wages and salaries, and that the Treasury will thereby gain, at a rough guess, about $12-15 billion a year in tax revenues. This is somewhat confusing to me," she writes. "I'm sure I'm missing something that would make the math work, but I can't figure out what." Howard Fineman, however, noted that most Republicans implicitly trust CBO projections.
  • Millions Still Without Coverage Jonathan Cohn compares Baucus's just-scored bill with the House's version. "That's significantly lower than the projections from the House bill, which would result in corresponding figures of 97 percent and 94 percent. In raw numbers, it's the difference between 25 million people (Senate Finance bill) and 17 million (House bills) still uninsured ten years from now," he writes. "And this is something we've known for a while: The Senate Finance bill isn't as generous or as protective as it ought to be."
  • Great For Uninsured, Little Change For Others Ezra Klein says this bill is designed primarily for those without insurance. "It will look a lot like our old health-care system. Unless you're uninsured, or on the individual market, this bill is not expected to affect you," he writes, calling those who gain coverage "a very big deal" and good news. But: "That leaves 245 million non-elderly Americans who will pretty much be in the exact place they would've been otherwise."
  • Republican Support? Please. Igor Volsky of Think Progress suggests the GOP will never hop on board. "Despite the positive CBO score and the bipartisan nature of the bill, it incorporates many conservative ideas, Republicans are still dismissing the legislation. In fact, during the last few minutes of mark-up, Sen. Chuck Grassley (R-IA), the ranking member on the committee conceded that regardless of the CBO score, 'There is a product here that all of the people on my side may not vote for.'"
  • It's Just a Projection, Not a Bill Politico's Chris Frates points out that the CBO was scoring Baucus's detailed description of a bill, not an actual bill. "Because the bill is still in 'conceptual,' or layman's terms, CBO's letter today was a 'preliminary analysis.' For it to be an official cost estimate, the bill has to be translated into legislative language. And CBO goes to great pains in its letter to make the distinction." William A. Jacobson put it in clearer (if somewhat misleading) terms: "THERE IS NO BAUCUS BILL."
This article is from the archive of our partner The Wire.