Why the CBO Can't be Trusted to Get Anything Right
Liberal opposition to the GOP ObamaCare replacement legislation got a boost this past week when the Congressional Budget Office released their study of the bill, predicting that 14 million Americans would lose their insurance if the replacement legislation passed.
How many hundreds of times has that number been quoted in the last few days? You would think that the CBO's word was the gospel truth and that they never get anything wrong.
Such is not the case. Every major metric in the ObamaCare bill that the CBO predicted would come to pass by now has been wrong by huge margins. From the number of enrollees in the exchanges (22 million predicted by 2016, instead 10 million actual) to how profitable insurance companies would be (they aren't), the CBO's track record isn't only questionable, it's laughable.
The Centers for Medicare and Medicaid Services (CMS) just released the final numbers for ObamaCare enrollment in 2016. By "final numbers" we hope that this is the last time CMS will have to report on enrollments in ObamaCare exchanges. CMS says that 12.3 million Americans signed up for insurance through the national and state exchanges.
But in 2013, CBO predicted that there would be 24 million enrollees.
Being off by 50% may be good enough for government work, but in the real world, basing a policy on the wildly inaccurate numbers provided by the CBO is lunacy.
"CBO has a poor record of predicting coverage," said Diana Furchtgott-Roth, a senior fellow at the Manhattan Institute. "In 2013, CBO predicted that 24 million people would be on the Obamacare exchanges, that law's health insurance marketplaces, in 2017."
Most recently, the budget office scored the Republican's replacement plan to Obamacare, the American Health Care Act, and projected that 14 million Americans would become uninsured due to the legislation.
"They haven't really said why their forecast of Affordable Care Act [ACA] enrollment was wrong," Furchtgott-Roth said, using another name for Obamacare. "So that's why their forecast of the coverage for the Republican bill is so odd."
"Here they are forecasting coverage, but they got it completely wrong under the ACA, because people didn't want to buy ACA coverage," she said.
The enrollment numbers also show fewer Americans selected an Obamacare plan this year than last. In 2016, 12.7 million Americans signed up, while 12.2 million signed up in 2017.
Federal health officials cited record signups leading up to the end of open enrollment, suggesting Americans would lose coverage under the new administration.
"Federal health officials Wednesday touted a record 6.4 million customer sign-ups on the federal Obamacare marketplace HealthCare.gov so far this open enrollment season—topping last year's pace during the same time period by 400,000 customers," CNBC reported. "And they sharply warned that insurance coverage gains under Obamacare could be lost if President-elect Donald Trump and congressional Republicans follow through on their threats to repeal the Affordable Care Act."
Democrats have been angrily insisting this week that ObamaCare is not "imploding." Yes, that may be an exaggeration of sorts. But if ObamaCare is not imploding, it is certainly being handed its hat and shown the door.
This year, residents in five states will have only one insurance plan to choose from in order to meet the requirements of the individual mandate. Another nine states will have only two options to choose from. Most major insurance companies have already pulled out of the exchanges while others have severely curtailed their representation.
The companies are losing money, premium costs are skyrocketing, deductibles are rising, health care is getting more expensive...
But ObamaCare is not "imploding." Remember that.
The CBO predicted none of this. In fact, its rosy scenarios went a long way to convincing centrist Democrats (there were a few left at the time) to vote for the legislation. Most of those centrists were defeated in 2010 and 2014 in GOP landslides.
Now, Democrats are making the same mistake—relying on the CBO figures to buttress their political arguments. It's hard to predict if many of them will suffer the same fate as those Democrats who were slaughtered in 2010 and 2014, but I certainly wouldn't bet against the chance of that happening.