Throughout the last decade’s debate over health policy, the Congressional Budget Office had a high degree of faith in the power of fines to get people to buy health insurance. That faith appears now to have been mistaken.
As I wrote earlier in the Corner, though, the CBO’s estimates of the impact of Republican health-care bills were heavily influenced by this exaggerated confidence. Democrats and the media then twisted the CBO’s mistaken estimates, claiming that Republicans would cause 14-22 million Americans to “lose” their health insurance. (Assuming the estimate had been correct, “voluntarily go without” would have been a better description in many cases.)
The CBO had an additional, subtler effect on the debate over repealing and replacing Obamacare. Take away the CBO’s exaggerated faith in the fines and its dubious assumptions about how states would respond to different rules regarding Medicaid, and the Republican bills would still, in all likelihood, have reduced the number of people on the insurance rolls. The bills could have been modified to shrink this effect. But the CBO’s error made Republicans less willing to make that effort.
Any Republican legislation was going to target the fines, which were one of Obamacare’s least popular features. (Republicans managed to abolish the fines while leaving much of Obamacare in place.) The CBO was going to find that almost any legislation that ended the fines caused a major decrease in insurance coverage. Changing other features of the legislation might have improved the real-world impact of it, but was not going to produce a good CBO score for coverage. That helps to explain why Republicans didn’t, for example, spend a little more to get more people covered: It wasn’t going to help any of their bills survive a debate so thoroughly shaped by the CBO.
We would have had a different, and better, debate if the CBO had not adopted a flawed model or if the press had given that model less credence.
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