In the national debate over the GOP health reform proposals, one data point has stood out above all others: the estimate, from the Congressional Budget Office, that more than 20 million people would “lose” coverage as a result. And there’s been an odd consistency to the CBO’s projections.
Do you want to repeal every word of Obamacare and replace it with nothing? The CBO says 22 million fewer people would have health insurance. Do you prefer replacing Obamacare with a system of flat tax credits, in which you get the same amount of assistance regardless of your financial need? The CBO says 23 million fewer people would have health insurance. Do you prefer replacing Obamacare with means-tested tax credits, like the Senate bill does, in which the majority of the assistance is directed to those near or below the poverty line? The CBO says 22 million fewer people would have health insurance.
22 million, 23 million, 22 million — these numbers are remarkably similar even though the three policies I describe above are significantly different. Why is that?
Thanks to information that was leaked to me by a congressional staffer, we now have the answer.
Nearly three-fourths of the difference in coverage between Obamacare and the various GOP plans derives from a single feature of the Republican bills: their repeal of Obamacare’s individual mandate. But the CBO has never published a year-by-year breakout of the impact of the individual mandate on its coverage estimates.
But the CBO has developed its own estimates of that impact, during work it did last December to estimate the effects of repealing the individual mandate as a standalone measure. Based on those estimates, of the 22 million fewer people who will have health insurance in 2026 under the Senate bill, 16 million will voluntarily drop out of the market because they will no longer face a financial penalty for doing so: 73 percent of the total.
As you can see in the above chart, two factors — repealing Obamacare’s individual mandate and the CBO’s outdated March 2016 baseline – explain nearly all of the CBO-scored coverage difference between GOP bills and Obamacare.
It’s why the various Senate tweaks to the Better Care Reconciliation Act — repealing fewer of Obamacare’s tax hikes, say, or throwing $45 billion at opioid addiction — have no impact on the CBO’s coverage estimates.
Some Republicans advocate starting over and writing an entirely new Obamacare replacement that can get a better CBO score. But any replacement that repeals the individual mandate will be scored by the CBO as covering at least 16 million fewer people — and probably worse.
GOP moderates, in particular, have been intimidated by the CBO coverage scores, expressing reluctance to vote for a plan that “takes coverage away” from so many. But if the only reason you’ve stopped buying insurance is because the government is no longer fining you for doing so, nobody has “taken away” your coverage.
It’s time for those moderates to choose. Do you support Obamacare’s individual mandate? If you do, then no GOP replacement will ever satisfy you. If you oppose the individual mandate, and would vote for its repeal, then you should ignore at least three-fourths of the CBO’s coverage score. The CBO has left us with no middle ground.