WP: CBO says health care repeal would deepen deficit

[@DCGoldPants]

So, here are my honest questions here.

1. Since this is such a hot topic. With one side saying the CBO is wrong, are they giving up the use of the CBO is the next report backs up something they support on another topic?
   
2. What other programs are being targeted for cuts to save debt?
   

http://www.washingtonpost.com/wp-dyn/content/article/2011/01/06/AR2011010606159.html?hpid=topnews

CBO says health care repeal would deepen deficit

By Amy Goldstein

Washington Post Staff Writer

Friday, January 7, 2011; 12:00 AM

Rescinding the federal law to overhaul the health-care system, the first objective of House Republicans who ascended to power this week, would ratchet up the federal deficit by about $230 billion over the next decade and leave 32 million more Americans uninsured, according to congressional budget analysts.

The rough estimate by the Congressional Budget Office also predicts that most Americans would pay more for private health insurance if the law were repealed. The 10-page forecast was delivered Thursday to House Speaker John A. Boehner (R-Ohio), installed a day earlier to shepherd the new GOP majority. He immediately dismissed it.

The CBO's assessment, arriving as Republicans have mobilized to make the law's repeal the first major House vote of the new Congress, touches on a sensitive area for the GOP. Republicans are vowing to take tough measures to reduce the deficit, although they already have exempted the health-care measure from rules requiring that any spending increases be accompanied by offsetting reductions so that the net effect on the deficit is null.

The CBO's analysis provided an early glimpse of the brute force politics spreading across Capitol Hill and beyond in the new era of divided government. The broad changes to the health-care system, pushed through Congress by Democrats who controlled both the House and the Senate until this week, are among President Obama's proudest domestic accomplishments -- and now a central target of the GOP. On Thursday, congressional Democrats and their allies seized the budget analysts' prediction as ammunition. "It's plain and simple: We can't afford to increase the deficit by nearly a quarter of a trillion dollars, especially with the very first substantive vote of the 112th Congress," said Senate Finance Committee Chairman Max Baucus (D-Montana).

With equal speed, Boehner and other House Republicans repudiated the forecast of the nonpartisan CBO, saying that its analysts had relied on flawed assumptions they had been provided by Democrats. "CBO is entitled to their opinion," Boehner declared at his first news conference as speaker.

Specifically, the CBO, in what it called a preliminary analysis, said that the law's repeal would cost $145 billion by 2019 and $230 billion by 2021, then swell after that, because various money-saving and revenue-raising provisions would be undone. The 32 million uninsured Americans refers to the number predicted to gain coverage under the law.

House Republicans countered with their own report, containing their portrayal of the financial effects of keeping the law intact. The report, filled with the incendiary language the GOP has adopted to discuss the law, is entitled: "Obama-care: A budget-busting, job-killing health care law" and features on its cover a gate padlocked with a thick chain.

The GOP report contests the CBO's assessment that the law would lower the deficit. And it picks apart aspects of the law that Republicans especially dislike, including a requirement that many employers offer their workers health coverage or incur a fine, and tax reporting requirements.

Meanwhile, David Cutler, a Harvard health economist who was an influential health-care adviser to Obama's 2008 presidential campaign, plans Friday to release a paper predicting harmful effects of repealing the law on health insurance prices and on jobs.

The dueling appraisals reprise the partisan acrimony that surrounded the law's passage last March. Some aspects have taken effect already, including provisions designed to let young adults stay longer on their families' coverage, help people who are sick find insurance and encourage older Americans to get more preventive care.

The heart of the law takes effect in 2014. For the first time, most people will be required to carry health insurance. More people will qualify for Medicaid, a public insurance program for people with relatively low incomes. And states are to open health-care marketplaces, called exchanges, intended to make it easier for people to buy coverage on their own or in small groups -- most with help from new federal insurance subsidies.

In their zeal to abolish the law, House Republicans have said they intend to offer their own recipe to replace it. They have not defined the specifics but are trying to portray themselves as more than obstructionists of Democratic thinking.

As a result, the House Rules Committee has drafted a resolution to be put to a vote on Wednesday, after the main vote on repealing the law, that would direct four House committees to produce legislation to replace it.

The resolution sets out a dozen broad goals that align with long-standing GOP preferences for changes to the health-care system. Among them are "increased competition and choice" in insurance, changes to the medical liability system, and giving states more freedom over the shape of Medicaid. One item -- to "provide people with preexisting conditions access to affordable coverage" -- appears to refer to an idea the GOP historically has liked: high-risk pools, which are part of the new law.

The common wisdom is that the House will have ample votes to approve its legislation to repeal the law - but that the idea then will die in the Senate before it has a chance to reach the White House, where Obama would be certain to veto it.

In light of those prospects, Boehner was asked at his news conference whether he thought the vote Wednesday will be a waste of time.

"No, I do not," the new speaker replied. "I believe it's our responsibility to do what we said we were going to do. And I think it's pretty clear to the American people that the best health-care system in the world is going to go down the drain if we don't act."

[Tulane Skins Fan]

No, they are going to point to the CBO, actually to the very same report, to say that the "new health care" should have a ton of tort reform in it. Nevermind, that would actually violate the Constituiton, i.e. the Seventh Amendment. But, the CBO will be good for that.

[Thiebear]

Juan Williams said it correctly: GIGO: The CBO can only report on what it is given with 'trust' in all of the pieces following through (which never happens).

Note:

Tort Reform was being pushed as the number one topic in a focus group i got paid to sit in on...

Every person in the room laughed at it being a priority1, but that was definitely the feeling of the group organizers.

[Larry]

Juan Williams said it correctly: GIGO: The CBO can only report on what it is given with 'trust' in all of the pieces following through (which never happens).

CBO bases their forecasts strictly on what the law says. They are forbidden from factoring in promises that politicians have made, but which have not been passed as law.

That's why, for example, the CBO was required to pretend that the Bush tax cuts were going to end this year. (And why they are now required to pretend that they will end in 2012.)

[SnyderShrugged]

CBO bases their forecasts strictly on what the law says. They are forbidden from factoring in promises that politicians have made, but which have not been passed as law.

That's why, for example, the CBO was required to pretend that the Bush tax cuts were going to end this year. (And why they are now required to pretend that they will end in 2012.)

Their estimates included the huge cuts in medicare reimbursement to dr's that were supposed to go through. (The Doc Fix Bill)

Those cuts are at least postponed and I'd bet that they never occur.

http://economix.blogs.nytimes.com/2010/12/17/the-annual-drama-of-the-doc-fix/

This alone blows the CBO assumptions out of the water. Couple that with the probability that the mandates wont hold up in the SC in the end, and their assumptions of savings are totally gone.

[Larry]

Their estimates included the huge cuts in medicare reimbursement to dr's that were supposed to go through. (The Doc Fix Bill)

Those cuts are at least postponed and I'd bet that they never occur.

http://economix.blogs.nytimes.com/2010/12/17/the-annual-drama-of-the-doc-fix/

This alone blows the CBO assumptions out of the water. Couple that with the probability that the mandates wont hold up in the SC in the end, and their assumptions of savings are totally gone.

So you're claiming that the GOP is going to cut Medicare reimbursement rates by 25%?

[Thiebear]

From Heritage Org.

They CBO might not be right all the time, but not due to a lack of effort:

Partial quote way down the page:

http://www.heritage.org/Research/Reports/2009/07/Understanding-CBO-Health-Cost-Estimates

Supplementary Information

Both the Congressional Budget Office and its congressional clients are well aware of the challenges that may arise in understanding budget estimates. As a result, the CBO often provides additional information about the basis for its estimates and about impacts that fall outside the conventional scores. This usually happens in response to questions from lawmakers and their staffs. Some recent examples include:

Estimates of policy impacts that are relevant to the budget score. In its estimates of recent health care legislation, for example, the CBO reported not only budget impacts, but also estimates of how insurance coverage would change.

More detail about the factors underlying an estimate. When the CBO released its estimate of the first version of the Kennedy health bill, for example, it received many questions about the changes in employer coverage. CBO Director Elmendorf responded by providing additional information on his blog.[22]

Impacts beyond the budget window. When the CBO examined immigration reform proposals in 2006, for example, the 10-year score did not reflect the long-run budget impacts of an increased immigrant population. In response to requests, the CBO prepared additional estimates of the budget impacts assuming that the effects of the proposals were fully phased in.[23]

Interest payments. As usual, the CBO's cost estimate for the recent economic stimulus bill did not include any effects on interest payments. In response to a request, however, the CBO estimated how much interest payments would increase over the budget window.[24]

Macroeconomic impacts. As usual, the CBO's cost estimate for the recent stimulus bill did not account for potential impacts on the size of the economy. In response to a request, however, the CBO estimated how large such "dynamic" effects might be.[25]

Conclusion

CBO cost estimates will play a central role in the ongoing debate about health policy. This is appropriate, given the potential cost of some proposals and the overwhelming budget challenges that we face.

[JMS]

If you listen to the Republican leadership closely they don't directly challenge the CBO or the fact the new healthcare bill will lower the deficit by hundreds of billions of dollars over the next ten years. What they do is claim it's accounting tricks. Which is accurate. It's accoulnting tricks which will save 100's of billions over the next 10 years.

The Republican leadership basically acknowledged this when they made an exception to their own rule on spending. All new spending must be offset by tax cuts; except for the new spending incured by repealing healthcare; whcih doen't need to be offset and will go directly to the national debt. Just like the Republican Healthcare bill of 2006; which was more expensive than Obamacare; and entirely unpaid for at the time.

[DieselPwr44]

Just grist for the mill for everyone to chew on:

http://www.thehopeforamerica.com/play.php?id=6566

Laugh, cry or cuss if ya want..........

[twa]

So, here are my honest questions here.

1. Since this is such a hot topic. With one side saying the CBO is wrong, are they giving up the use of the CBO is the next report backs up something they support on another topic?
   
2. What other programs are being targeted for cuts to save debt?
   

The CBO will be used when it helps and dismissed when it doesn't..SOS

Medicare/caid are being targeted for cuts,adjustments

the military is scheduled for heavy cuts and expecting even more, in systems,platforms,bases and personnel

all these like all CBO savings will be over a 10 yr span

[gbear]

One question I have for all those in favor of repealing the health care law. I have heard many insurance companies say they had to raise their rates because of new coverage requirments, and that was supposed to be a one time raise. Now if the healthcare law is repealed, how many think the insurance rates will drop back down? Show of hands? My bet is a claim of needing the higher costs to account for the uncertainty in a market where the rules keep changing.

Now if the Republicans are true to their word and actually try to put their own plan forward after repeal, how many think insurance will yet again rise because the old saying of "nothing for nothing."

I think we the healthcare purchasers are going to get seriously abused if the repeal goes through in any meaningful way. It's fine to say you don't like it, but please be honest in your thoughts on the probable impacts of you actions.

[JMS]

the military is scheduled for heavy cuts and expecting even more, in systems,platforms,bases and personnel

I don't know if you picked up on the Proposed 100 billion in cuts which Defense Secretary Gates is proposing.... Gates is cutting funds from specific army, navy and Marine Corps projects; but he's being extra double trickey doing it.

(1) He's not taking the money saved away from the military. They get to keep the money and spend it on something else. So the net budgetary effect of Gate's 100 billion in "cuts" is NADA.

(2) In the same briefing where he anounces these phantom cuts; he actually announced defense budgetary increases in future years; calling it "the minimum budget to ensure national defense."

It was a little bit like watching Lary Bird pull up on the wing and shoot a tre. or Pelle do a bycicle kick in his prime. Gates is a wizard of the defense politics.

[karmacop]

Eric Cantor and other prominent Republicans have been quick to praise the CBO in the past when it suited their needs, so their refutation of these particular CBO numbers smacks of partisan politics now.

[nonniey]

Bottomline in this particular estimate the CBO relied on many bad assumptions, not that (as others have pointed out) they could do anything else. However since the bill was passed it is now known that Obamacare will be far more expensive.

From the New York Times: Buckle Up for Round 2

"....More seriously, cost projections are way off. For example, New Hampshire’s plan has only about 80 members, but the state has already burned through nearly double the $650,000 that the federal government allotted to help run the program. If other projections are off by this much, the results will be disastrous.

Employee dumping. This is the most serious threat. Companies and unions across America are running the numbers and discovering they would be better off if, after 2014, they induced poorer and sicker employees to move to public insurance exchanges, where subsidies are much higher.

The number of people in those exchanges could thus skyrocket, especially as startup companies undermine their competitors with uninsured employees and lower costs. The Congressional Budget Office projects that 19 million people will move to the exchanges at a cost of $450 billion between 2014 and 2019. But according to the economists Douglas Holtz-Eakin and James C. Capretta, costs could soar to $1.4 trillion if those who would be better off in the exchanges actually moved to them. The price of the health care law could double. C. Eugene Steuerle of the Urban Institute, who has been among those raising the alarms about this, calls the law’s structure “unworkable and unfair....”

Click Link for rest of article:

http://www.nytimes.com/2011/01/07/opinion/07brooks.html

...

[shk75]

A big reason that the costs will still be so high after the reform is because insurance companies are still allowed to operate as for profit institutions. No country in the world has shown that it is possible to run a for profit insurance system without skyrocketing costs and poor outcomes. Add to that the fact that the mandate is not really a mandate and you will have about 23 million Americans still uninsured many of whom will most likely be those who believe they are healthy and will thus skew the customer pool towards those who are unhealthy. This will in turn encourage insurance companies to like you say try to find loopholes to dump customers since they will be stuck with a sicker base population.

[Predicto]

Bottomline in this particular estimate the CBO relied on many bad assumptions, not that (as others have pointed out) they could do anything else. However since the bill was passed it is now known that Obamacare will be far more expensive.

From the New York Times: Buckle Up for Round 2.....

I wish that people would not identify editorials as being "articles from the New York Times" or whatever.

David Brooks is a conservative pundit who used to work for the Weekly Standard, and now is a conservative pundit employed by the NYT. He may be making good points (or not) but his editorials are not factchecked or vetted the way that regular articles are. He is presenting a point of view, not "news."

Not knocking you in particular nonniey - it's just a pet peeve of mine.

[JMS]

A big reason that the costs will still be so high after the reform is because insurance companies are still allowed to operate as for profit institutions.

The reason repealing the Obama care reform increases the proposed budget deficite by 100's of billions over ten years; is because the federal government is a major consumer of healthcare products. Obama care might not reduce the cost of healthcare independent from subsidies. But what it does do is hold down the astronomic growth in healthcare costs. Thus reducing future budget deficites and adding more money into the pockets of consumers...

As for the insurance companies are still for profit companies; you should check that. Obama care bill actually caps the money the Insurance companies are allowed to spend as a percentage of what they spend on actual healthcare delievery to their customers. i forget the percent or the year it kicks in but essentially it rolls back significantly insurance companys abilitiy to make a profit.

[nonniey]

I wish that people would not identify editorials as being "articles from the New York Times" or whatever.

David Brooks is a conservative pundit who used to work for the Weekly Standard, and now is a conservative pundit employed by the NYT. He may be making good points (or not) but his editorials are not factchecked or vetted the way that regular articles are. He is presenting a point of view, not "news."

Not knocking you in particular nonniey - it's just a pet peeve of mine.

I pointed out this was from the NYTimes. Didn't I? I think we all know by now that all their articles are really editorial in nature. ;-)

[Predicto]

I pointeed out this was from the NYTimes. Didn't I?

Yes. You should have pointed out that the piece was by conservative pundit David Brooks. Because that's who it really is from. That's all I'm saying.

[nonniey]

Yes. You should have pointed out that the piece was by conservative pundit David Brooks. Because that's who it really is from. That's all I'm saying.

You're bit off your game this morning. That shot at the NYTimes went right past you.

[SnyderShrugged]

So you're claiming that the GOP is going to cut Medicare reimbursement rates by 25%?

why in the world would you infer that I claimed that? There was no mention of it in my post was there?

Reading is fundamental

I simply explained why the assumptions used in the CBO analysis could likely be off.

---------- Post added January-7th-2011 at 12:56 PM ----------

I wish that people would not identify editorials as being "articles from the New York Times" or whatever.

David Brooks is a conservative pundit who used to work for the Weekly Standard, and now is a conservative pundit employed by the NYT. He may be making good points (or not) but his editorials are not factchecked or vetted the way that regular articles are. He is presenting a point of view, not "news."

Not knocking you in particular nonniey - it's just a pet peeve of mine.

seems as though EVERY time a conservative is used as a source its part of your pet peeve here lately.

just an observation

[shk75]

The reason repealing the Obama care reform increases the proposed budget deficite by 100's of billions over ten years; is because the federal government is a major consumer of healthcare products. Obama care might not reduce the cost of healthcare independent from subsidies. But what it does do is hold down the astronomic growth in healthcare costs. Thus reducing future budget deficites and adding more money into the pockets of consumers...

As for the insurance companies are still for profit companies; you should check that. Obama care bill actually caps the money the Insurance companies are allowed to spend as a percentage of what they spend on actual healthcare delievery to their customers. i forget the percent or the year it kicks in but essentially it rolls back significantly insurance companys abilitiy to make a profit.

What you are referring to is the attempt to limit the spending done by insurance companies on such things as marketing, overhead, and administrative costs. Right now the average insurance company spends around 20% on these items and only 80% on what is referred to as the medical loss (yes that is right health insurance paying your claims is actually considered a loss). PPACA wants to raise this spending from 80% to 85%. While this is a start it is still drastically lower than the 97% most other insurance companies spend in other OECD nations.

[Larry]

why in the world would you infer that I claimed that? There was no mention of it in my post was there?

Because if you don't believe that, then your post is completely meaningless.

Thinking is fundamental, too.

CBO compares two scenarios:

1) Obamacare is left alone

2) Obamacare is repealed.

Both projections assume that the tax cuts will expire in 2012.

They conclude that option 2 will cost $100B more.

Well, you know what? The fact that both projections are made on the same untrue assumption is irrelevant. Because both projections used the same incorrect assumption, when you subtract line 2 from line 1, the assumption disappears.

I simply explained why the assumptions used in the CBO analysis could likely be off.

No, you threw up a completely meaningless excuse to try to ignore results you don't like.

[SnyderShrugged]

Because if you don't believe that, then your post is completely meaningless.

Thinking is fundamental, too.

CBO compares two scenarios:

1) Obamacare is left alone

2) Obamacare is repealed.

Both projections assume that the tax cuts will expire in 2012.

They conclude that option 2 will cost $100B more.

Well, you know what? The fact that both projections are made on the same untrue assumption is irrelevant. Because both projections used the same incorrect assumption, when you subtract line 2 from line 1, the assumption disappears.

No, you threw up a completely meaningless excuse to try to ignore results you don't like.

If thinking is fundmental then you seem to have a problem.

Lets stay on point please.

You seem to have a bad habit of reframing the debate into something you think is more valuable to the discussion rather than addressing the original points made. Its rather silly to be honest.

The GOP has literally nothing to do with the plain and simple fact that some of the assumptions used in the CBO analysis are potentially wrong, depending on decisions made in congress. The Doc Fix is a big one. It cant be held seperate in this discussion because the so called savings was based in large part on the assumption that medicarfe reimbursement rates would expire as planned.

If they dont actually expire as planned, the savings gained assumption is moot.

[nonniey]

why in the world would you infer that I claimed that? There was no mention of it in my post was there?

Reading is fundamental

I simply explained why the assumptions used in the CBO analysis could likely be off.

Could be? No could be about it. They are off and this was known at the time of passage. That said the bill has become more unpopular because the cost is even worse than even the pessimists thought.

In March it was known that the costs were based on 10 years fees and taxes paying for only 6 years of spending; additionally the cost of operating the program was never included and that will be $10s of ($100s?) of billions more. And that was in March. It now is known that it financially benefits private Companies and Unions to push many of their poorer and sicker workers off company plans into the public insurance exchanges. If Unions and Companies did that it would double the original cost estimate to the Government. Now how many of you are willing to bet that Companies and Unions would forego doing this because it would devastate the US debt situation (Anyone? Anyone?).