Politics & Policy

Coercing Coverage

(Photo: Pixelrobot/Dreamstime)
There's a difference between ‘losing’ and ‘dropping’ insurance.

Defending his claim that people will die if Republicans pass their health-care bill, Senator Bernie Sanders said it would “throw 23 million Americans off of health insurance.” I defended his people-will-die argument as within the bounds of fair debate, even if he is much too confident in projecting the effects of health policy. His follow-up comment strikes me as much less defensible, because it’s false —a misrepresentation of the source on which it purports to rely.

Sanders based his claim on the Congressional Budget Office’s report on the House version of the bill, which does indeed say that 23 million fewer people will have insurance in 2026 under the bill than without it. Its report on the Senate bill changes that number to 22 million. But the CBO doesn’t say that the law would “throw 23 million Americans off of health insurance.” It suggests that people who decided to go without insurance once they no longer faced the threat of a fine for choosing that option would make up a substantial portion of that number.

The CBO projects that in the bill’s first year of operation, 15 million fewer people would buy insurance. It says that this would “primarily” result from the end of Obamacare’s fines, which are also known as the “individual mandate.” It’s hard to think of other portions of the legislation that would do much to change enrollment in year one, so we can assume that “primarily” means “almost all” — which is the assumption that Doug Badger makes in his NRO article about these issues. The CBO does not explicitly say how much of the long-run coverage reduction happens because of the end of the fines, but it does suggest that the effect would linger.

I think there are good reasons to doubt the CBO about the power of Obamacare’s fines. But if the CBO is right, then we confront a very different picture of the effects of the law.

It makes a moral difference: Whether or not giving people more freedom to go without health insurance is a good idea, it’s just not the same thing as taking insurance away from them. It makes a political difference, too. Headlines about 15 million people “losing” their insurance in the first year of the bill’s operation would be bad for the Republicans, but it’s a mistake to assume that the actual people included in that number would all be upset: A lot of them, by their own lights, would be better off leaving the insurance rolls.

It may even make a medical difference. As far as I know, the studies that claim that insurance coverage lowers mortality rates don’t address the effects of voluntarily forgoing coverage, which may be different from the effects of forgoing it because of a lack of options. And to the extent that voluntarily forgoing insurance raises mortality rates, it too raises a different set of issues than heightened mortality based on involuntary non-coverage: The former is more like letting people ride motorcycles than like putting arsenic in their water.

Whether or not giving people more freedom to go without health insurance is a good idea, it’s just not the same thing as taking insurance away from them.

Paul Ryan has been emphasizing that much of the reduction in insurance coverage under the bill would come from the end of the individual mandate. Jonathan Chait says he is exaggerating the extent to which the CBO’s coverage projection is based on the end of the individual mandate. Chait says that, to the contrary, the CBO found that two-thirds of the coverage reduction will happen through Medicaid cuts rather than through the exchanges. But the CBO does not confine the effects of the individual mandate to the exchanges. It says explicitly that its end will reduce enrollment in Medicaid. Since the end of the mandate is the main portion of the bill that we could expect to have an impact on coverage in year one, we can infer that the CBO believes that the end of the mandate would cause around 4 million people to go without Medicaid next year. (It does not provide specific numbers for later years.) Again, I think that number is implausibly high, but that’s how the CBO gets its numbers.

Chait also suggests that if Ryan is right, it just means that the policies offered under the Republican legislation would be so bad that people would not find them attractive. But the CBO says that the end of the individual mandate would cause 15 million people to go without coverage in the first year of the bill’s operation, which suggests that the CBO thinks it’s Obamacare-compliant policies that millions of people don’t find attractive.


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