So yesterday’s debate about whether Lamar Alexander or Obama had it right about whether premiums will go up has, predictably, dominated a lot of the coverage. I suspect this is in no small part because much of the press tuned out soon thereafter. That exchange ended up becoming symbolic for the whole event, for NPR and the cable nets. Today, unsurprisingly, Krugman takes Obama’s side entirely. His way of conceding there’s actually a serious debate on the topic is to write of Alexander:

Wow. I guess you could say that he wasn’t technically lying, since the Congressional Budget Office analysis of the Senate Democrats’ plan does say that average payments for insurance would go up. But it also makes it clear that this would happen only because people would buy more and better coverage. The “price of a given amount of insurance coverage” would fall, not rise — and the actual cost to many Americans would fall sharply thanks to federal aid.

Meanwhile, I though James Capretta’s take yesterday was pretty well done. He writes:

The Congressional Budget Office (CBO) says that premiums would go down in the individual market from the Senate bill for the kinds of insurance offered today. The problem is that people couldn’t get that kind of insurance anymore. They would be forced into more expensive plans, with higher premiums. And so, overall, premiums in the individual market would go up, not down.
Moreover, there are several studies showing why CBO is wrong about premiums declining for current policies.
Here’s one. Oliver Wyman Inc., a respected actuarial firm, did a careful study for the Blue-Cross Blue Shield Association. They found that premiums in the individual market would be 54 percent higher in five years’ time if the Senate bill were enacted, and 20 percent higher for those insured through small businesses.
Why the difference with CBO? The reason is that CBO thinks the individual mandate will be effective in bring people into the market. That is not at all the view of many, many experts who understand the insurance business. Almost uniformly, they say the mandate in the Senate bill is too weak and won’t work. Consequently, the risk pool will become much less healthy over time, thus driving up premiums.
So, no, Senator Alexander should not at all concede the point. He’s right. If the Obama plan were enacted, premiums in the individual market would go up, a lot.

What I liked about Jim’s take was that he was willing to question the papal infallibility of the CBO. The discussions yesterday were very annoying in the way both sides invested in the CBO scoring’s ultimate authority. The CBO says this! No, no, the CBO says that! It was as if the CBO report was a divine prophecy, and whereas there might be debate among the priests and sages over its meaning no one disputed that if you could just glean what that meaning is/was, the path to the future would be clear (to his credit, Paul Ryan didn’t play that game).

One of the bedrock conservative points in this whole debate is that the government is not great at planning. It can’t anticipate all of the unintended consequences. Well, the CBO is part of the government, too. It has an inherent knowledge problem. I believe the CBO is full of honest and serious professionals and their judgments should be given serious weight (even though Congress seems to be getting better at gaming how their proposals are scored). But CBO reports aren’t gospel.

(Moreover, if you take people like Barney Frank and the old Barack Obama at their word, that this is all a stepping stone toward universal coverage, then what the CBO says about this plan is even less important, but that’s a different argument).

Question: Has there been a good study of how often CBO predictions about the consequences of legislation have turned out to be right? That seems like a great topic for a Congressional Research Service report.