February 7th, 2013

On the deeply flawed CBO scoring of Obamacare, and what it means

Read this and get angry about Obamacare all over again. Remember how it had to receive a good report from the CBO in order to be passed? Well, here’s how the smoke and mirrors worked:

In sum, the scorekeeping baseline used to show a positive fiscal effect for the ACA reflects neither actual law nor historical practice. This hypothetical scenario, involving as it does perpetual overrides of Social Security and Medicare financing restrictions, would be untenably expensive. Yet it was only in comparison with this extreme and extra-legal scenario that the ACA was found to slightly reduce projected federal deficits. In comparison with actual prior law, the legislation greatly worsened the fiscal outlook…

The savings provisions of the ACA are insufficient to both finance an extension of Medicare solvency and to fund a massive new health entitlement. So even if the law’s savings provisions all worked as originally envisioned, the ACA would still add at least $340 billion to federal deficits over its first ten years. Even this outcome would require that lawmakers allow many of its provisions to inflict a steadily higher toll on taxpayers, providers, and beneficiaries over time. If instead Congress re-indexes these provisions in keeping with historical precedent, the deficit increase under this more pessimistic scenario would be over $500 billion in the first decade alone.

And then there’s the SCOTUS decision on the states and Medicare. In all the brouhaha about the individual mandate, the other portion of the SCOTUS decision didn’t get as much press, but it matters, and its effects are somewhat unknown at this point:

he CBO subsequently reassessed the ACA in light of the Supreme Court ruling. Previously CBO had assumed full state participation in the Medicaid expansion, increasing program enrollment by 17 million by 2022. After the Court’s decision, CBO lowered this estimate by roughly one-third, meaning that 6 million potentially eligible individuals would not be covered under Medicaid. CBO’s updated financial evaluation was better in some respects, worse in others:

—CBO projected that of the 6 million no longer expected to be covered under Medicaid, 3 million would remain uninsured altogether. This would reduce projected federal expenditures.

—CBO projected that the other 3 million would instead be insured under the ACA’s new health insurance exchanges. This would increase costs because the federal government is expected to pay more to cover these individuals under the exchanges than it would have through Medicaid.

There’s much, much more at the link.

11 Responses to “On the deeply flawed CBO scoring of Obamacare, and what it means”

  1. physics geek Says:

    I’m not angry. Rather, I feel vindicated. I knew where this was headed: higher (much) costs, less coverage and worse care, followed inevitably by single payer. My lefty friends keep saying that I’m wrong, but apparently they haven’t been able to browbeat mathematics by calling it racist.

  2. Sam L. Says:

    Quel Suprise!

  3. George Pal Says:

    It is a testament to the corruption of government and both parties that the CBO continues to exist. It’s not just that they are wrong all the time, sometimes, oftentimes, monumentally, colossally so, but they are required to be so. Forsworn by law from making any but baseline projections they are excused from taking into account anything that would dash the government’s desires, i.e., the real world.

    At CBO.gov – “Congressional Budget Office – Supporting the congress since 1975”.

    I’ll say. Note the year and any chart of U. S. debt/deficit spending. Forget defunding PBS first. First get rid of the utterly useless CBO.

  4. M J R Says:

    When it was first presented to me that the Anointed One and His ilk were going to

    – insure (virtually) everyone;
    – even those with preexisting conditions;
    – at a lower cost to the individual; AND
    – would reduce the annual federal deficit,

    my immediate reaction was it was an actuarial impossibility.

    I was reminded rather instantly of . . .

    Y’know those ignorant hayseeds who tried to legislate that the value of pi must be equal to “3”? It’s based on something in the Bible.

    Now . . . y’know those people who look down their long intellectual noses at the Bible-thumping ignorant hayseeds who tried to legislate that the value of pi must be equal to “3”?

    Yeah, pretty much the same people, more or less, who are firm believers in the Affordable Care Act (ACA). Yeah, ^them^.

    They’ll snicker at legislating that the value of pi must be equal to “3”, but they’ll swallow this ACA horseturd whole — and look down their long intellectual noses at those of us who ^know^ it’s an actuarial impossibility.

    Yes, good folks, ^we^’re the village idiots.

  5. Geoffrey Britain Says:

    OK, so despite it being a congressional budget office, the CBO is in the administration’s pocket. The CBO supported and facilitated a monumental lie to the American people for ideological reasons (the democrats).

    Adding insult to injury, we may be sure that the left will compound the lie by bearing ‘false witness’ against the right when the financial ca-ca hits the fan. Count on it, they will blame the Republicans and claim that ‘corrections’ need to be made, that will amazingly (sarc off), move us closer to single payer (the government) health insurance.

    As many of us know, that’s what ObamaCare is really all about.

    The MSM can be counted upon to back the dems and the public will be led ever closer to ‘the gallows’ and the Gramscian march continues.

    When will the sheep awaken? Maybe never, as the fictional bandit in the movie ‘The Magnificent Seven’ asserted, “if God did not want them to be sheared, he would not have made them sheep”.

    Based on Kurosawa’s truly magnificent “The Seven Samurai”, it is the brutality of their oppressors that finally pulls the “the wool from the villager’s eyes”. Perhaps that’s what it will take for the American people too.

  6. artfldgr Says:

    of course the moan of “Do the math” i have said covering everything from healthcare to demographics, etc

    you still havent grasped the rules of the new game…

    raising your taxes is the object of discussion
    but how?
    thats the argument for your consumption

    the argument for consumption can be a lie, can be the truth, can be a mix, or even something unrelated that would also get you to make the selection.

    its why social engineering is so well funded (As it provides better and better knowledge of how to control people without their cooperation).

    in order to get it, you have to go through a kind of mental change. your worldview has to flip over.

    an example of this, but different is hyper-awareness after an event… idiot shoots kids, we become hyper-aware of guns – that’s fed back and it screeches out like an Marshall stack amp at a Beatles concert

    but let me give you an example of how clever it can be…

    you own two horses… (symbolism eh?), and you want to sell them both to the glue factory to buy a new model T from that guy ford…

    now, these horses are like people. they have their own lives, wills, desires, etc… they are happy to take the owner where he wants to go, or plow a field because that is what horses do. but if the owner tells them he is going to take them to the glue factory, they wont go. not only that, but if they think the owner will take them there, they will not go.

    these horses HAVE common sense…

    so what is the owner to do? if you think of despotisms in the past, he shoots the horses, and then has to take them the whole way, get his cash, then get the car. not only does that make a mess, it also turns the rest of the horse world against the entity for a while.

    but, if you understand the idea of arguments which are real, and arguments to manipulate, and the latter has no purpose other than to move living beings who cant be compelled…

    then you start to think differently…
    your going to exploit the assumptions of the horses in terms of you, and your going to play on their customs, and faults and so on.

    so here is what the farmer does…
    and is an illustration right out of dialoguing to consensus in analogy….

    he tells the white horse that he is going to take the black horse to the glue factory, and the white horse has to come to bring him back home, and to keep it secret or else the black horse wont cooperate.

    he tells the black horse that he is going to take the white horse tot he glue factory, and the black horse has to come to bring him back home, and to keep it secret, or else the white horse wont cooperate.

    the next day, the man hooks both horses up to his cart, and they happily go to the glue factory… where the reality hits them way too late, and he gets into his car and goes home

    and the horses, like feminists, or race groups, and so on. will NEVER listen to the other… the prize being offered that gives them something AND hurts the other they want revenge on, or parity, or something… is too sweet… they will risk their own destruction to get it.

    want proof? women have self exterminated to get back at their mates for oppressing them since they were spontaneously created (As they also deny god too)… and that once they get to the glue factory, those mates are going to get their punishment.

    the idea of then what never stops them either.

    for instance… either of the two horses could have concluded that without the other, they would have to take up the jobs and work of the other… so maybe selling your other to the glue factory would not be so good…

    same difference though.
    you can use the analogy for any of these groups.

    its not an accident, its a methodology
    and it wont be stopped till we realize and get angry that they are applying methodology to us…

    but that would require admitting being duped
    and the groups in thrall also have the biggest inflated egos
    so they wont do that

    welcome to the glue factory
    over the gate is Arbeit Mach Frei…

  7. parker Says:

    The IRS estimates that under the new rules a bare bones policy will cost the typical family of four a minimum of $20,000 per year. Meanwhile medium and small businesses will find it cheaper to pay a fine and discontinue insurance benefits. Already many businesses have cut employees to under 30 hours a week in order to duck under the ACA limbo razor wire. And more is in store as the biggest whammy will hit in 2014 when the full consequences of the ACA hit the pavement running. And we think the economy is stalled now!

  8. southpaw Says:

    This actually opens the door for a whole new federal bureaucracy to study and improve the nimbleness of the ACA and its supporting beauracracies. Not only will that create more jobs, it’s sure to release useful studies that update Americans on how many of them died waiting for their healthcare, how many were made ill by poor care, and so on. It might even announce a new disease – the ACAitis, whose symptoms include destitution, premature aging, and death.
    Rather than solve any problems, itselt, the new bureaucracy, will recommend and oversee the creation of 3 other bureaucracies to police and insure quality over the entire system, at some point including itslef, which will create more jobs to pay taxes to itself. What’s to not like about this?

  9. Geoffrey Britain Says:

    The purpose of ObamaCare is NOT to achieve a more efficient system of health care. It’s to pave the way for government single-payer health care. ObamaCare’s negative costs are considered a positive benefit by the left, in that they will allow them to incrementally ‘refine’ ObamaCare, permitting the left to achieve full socialization of health care.

    Businesses are going to drop health care benefits in droves, as they already are beginning to do and the majority of those left without healthcare are going to turn to government healthcare which will arise as health insurers get out of the business.

    ObamaCare is designed to put private health care insurers out of business. So pointing to how much it will cost businesses, families and individuals is pointing at the entire point of it.

  10. NotsoheavyD Says:

    I’m surprised nobody posted this link

    Yeah, there’s a video covering this and it’s from 2009

  11. Cincinnatus Says:

    I think that in fact the scoring rule Congress gave CBO is perfectly reasonable.

    Congress wrote the law requiring there to be “funds” in the entitlement accounts for payments to be made, and they can change that law at any time for any reason.

    In telling the CBO to assume that they wouldn’t ever stop SS or Medicare payments, they are simply affirming that if it came to that point, they would change the law. There’s little reason to doubt it. To do otherwise would cause a human disaster out of caprice–the government holds no real assets in the to pay SS or Medicare , just worthless papers saying in effect, “I owe myself this much money”.

    Because the great majority of voters believe profoundly in the “trust funds”, explanation is called for.

    In reality, all SS and Medicare checks are funded by the same source as any other outlay, money collected in current taxes and borrowing. If they changed the law to permit spending after the “trust fund is depleted”, it would have absolutely no effect on anyone. Instead of one agency having steadily decreasing fictitious bookkeeping “liabilities” and another having exactly equal and decreasing “assets”, the first would have a ficticious and increasing “asset” and the second would have an increasing “liability”.

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Previously a lifelong Democrat, born in New York and living in New England, surrounded by liberals on all sides, I've found myself slowly but surely leaving the fold and becoming that dread thing: a neocon.

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