The Corner

Problems With The CBO’s Obamacare Repeal Estimates

As Rich notes below, the Congressional Budget Office just released a report estimating that if Republicans pass a carbon copy of their January 2016 bill to partially repeal Obamacare, 18 million fewer people would have health insurance in 2018, and 32 million fewer in 2026. Premiums would go up by 20-25 percent in 2018, and double by 2026. Today at our Forbes blog, I have a post up detailing the problems with the CBO’s estimates. I’ll summarize them here.

1. The CBO’s estimates assume no Obamacare replacement. Obviously, if you only repeal, without a replace, fewer people will have health insurance than they do under current law. Republicans have promised to repeal and replace the law, but the CBO could only score the repeal because the replacement has not yet been put into legislative language. Donald Trump promised over the weekend that his replacement would offer “insurance for everybody,” though his press secretary sought to dial back that promise.

2. The CBO massively overestimates the impact of Obamacare’s individual mandate. CBO believes that 18 million fewer people will have coverage in 2018 due to the fact that the partial repeal bill, H.R. 3762, immediately repeals the individual mandate. The CBO has long held a view of the mandate’s power that far exceeds reality. For example, CBO believes that 5 million fewer people will be enrolled in Medicaid as a result of repealing the mandate. But enrollees in Obamacare’s Medicaid expansion are mostly exempt from the individual mandate, due to their low incomes.

3. The GOP repeal bill is likely to treat Medicaid differently than H.R. 3762 does. In H.R. 3762, last year’s partial repeal bill, Republicans repealed the entirety of Obamacare’s Medicaid expansion. This time around, they may do something different, such as allowing states to continue their Medicaid expansions but with only 60 percent of the costs covered by the feds, like the old Medicaid program, instead of 90 percent as under the Obamacare expansion. Hence, the impact on coverage under Medicaid will be lower than in H.R. 3762.

4. The CBO has a poor track record of predicting Obamacare’s coverage numbers. In 2010, the CBO predicted that 21 million people would be enrolled in Obamacare’s exchanges. The actual number was 12 million. CBO does not appear to have significantly adjusted its thinking in light of these issues.

The full article is here. For thoughts on how to cover the uninsured in a market-based way, read “Understanding FREOPP’s Obamacare Replacement in 10 Minutes or Less” at the website of our new think tank, the Foundation for Research on Equal Opportunity.

Avik RoyMr. Roy, the president of the Foundation for Research on Equal Opportunity, is a former policy adviser to Mitt Romney, Rick Perry, and Marco Rubio.