In his article, “Guy Who Gets Paid to Say Obamacare Doesn’t Work Can’t Find a Single True Fact to Support His Case,” Jonathan Chait, NEW YORK MAGAZINE 2/18/15, http://nymag.com/daily/intelligencer/2015/02/obamacare-hater-cant-find-single-true-fact.html, (Chait), Jonathan Chait criticized Stephen Moore’s assessment of the affordability of the ACA [“Affordable care that isn’t affordable: Despite the President’s promises, health care costs are going up,” Stephen Moore, THE WASHINGTON TIMES, 2/15/15, http://www.washingtontimes.com/news/2015/feb/15/stephen-moore-affordable-care-act-isnt-affordable/, (Moore)]
In Part I we determined that based on the CBO’s information and lack of information that the “all of the act’s budgetary effects” could not be determined, Congressional Budget Office’s January of 2015, “Updated Estimates of the Insurance Coverage Provisions of the Affordable Care Act,” http://www.cbo.gov/sites/default/files/cbofiles/attachments/49892-breakout-AppendixB.pdf, page 1.
In Part II, we saw that both Stephen Moore and Jonathan Chait mislead consumers by honing in on specific pieces of information that are accurately reported but are used to draw conclusions that they cannot prove, specifically, overall spending for Obamacare. We also get to the point that what the CBO does forecast is how spending is going based on its prior projections and its new projections for the items on which it reports.
That brings us to Part III of the Chait and Moore articles, Chait’s from the Obamacare-is-working point of view and Moore’s from the Obamacare-is-NOT-working point of view: IS THE GOVERNMENT ACHIEVING ITS FISCAL TARGETS FOR DIRECT HEALTH INSURANCE COVERAGE EXPENSES WITH RESPECT TO A COMPARISON OF CBO PROJECTIONS TO EXPERIENCE SO THAT WE CAN RELY ON CBO PROJECTIONS MOVING FORWARD?
FIRST: In its 1/15/15 report, the CBO PROJECTS that “…the ACA’s coverage provisions will result in net costs to the federal government of $76 billion in 2015 and $1,350 billion over the 2016–2025 period,” (CBO, 1/15/15, page 1). We know that this is NOT a consideration of “all budgetary effects” but those confined to coverage provisions.
SECOND: According to the CBO, these results, “Compared with the projection from last April…represents a downward revision in the net costs of those provisions of $101 billion over those 10 years, or a reduction of about 7 percent,” (CBO, 1/15/15, page 1). What we’re comparing are the projections from 2014 to the projections of 2015 made by the CBO.
THIRD: MEDICAID: Stephen Moore cites a report by the CBO, Congressional Budget Office’s, “Monthly Budget Review for January 2015,” 2/6/15, https://www.cbo.gov/publication/49924, (CBO, 2/16/15), to state that Medicaid spending is up in the first four months of this fiscal year. THIS IS TRUE.
Moore’s mentions that “Medicaid spending is up a stratospheric 23 percent so far this year,” (Moore) and Jonathan Chait becomes furious, launching an off-topic lecture about how Obamacare is supposed to work and honing in on how Medicaid is not welfare. Chait’s response is an irrelevant response to a TRUE statement.
MEDICAID and the Congressional Budget Office: Based on its own projections, the CBO projects that the federal cost of the additional enrollment in Medicaid and CHIP under the ACA over the 2015–2024 period will be $851 billion,$59 billion (7 percent) more than the April 2014 projection,” (CBO, 1/15/15, page 13).
This is a PROBLEM FOR JONATHAN CHAIT and contradicts his own argument put forth to show that Obamacare is meeting its fiscal targets because while he asserts that “the design of Obamacare all along was to spend money to cover the uninsured,” (Chait), EVEN WITH the Supreme Court Decision that made Medicaid expansion an OPTION and therefore REDUCED the number of individuals NEWLY ELIGIBLE for Medicaid, enrollment and EXPENSES are and are projected to continue to be higher than expected.
When it comes to Medicaid, the CBO got it wrong, MEDICAID IS COSTING MORE THAN PROJECTED. As explained in the report, the CBO now states that the “…estimate that enrollment in Medicaid in 2014 among those eligible for the program because of the ACA’s coverage expansion was higher than originally thought and that enrollment among those previously eligible for the program was lower,” (CBO, 1/15/15), p. 13).
There is a tremendous spending impact on getting Medicaid wrong regarding those who become NEWLY ENROLLED because of the expanded Medicaid provisions because as the CBO states, “…because the federal government pays a larger share of the costs for newly eligible enrollees (100 percent to 90 percent, depending on the year) than for other enrollees (an average of 57 percent),” (CBO, 1/15/15, page 14).
In spite of Jonathan Chait’s dancing around the issue, he does NOT address Mr. Moore’s assertion that Medicaid spending is something THAT IS A FISCAL CONCERN and that the CBO confirms federal spending is going to be much higher than projected previously.
FOURTH: PREMIUM TAX CREDITS, COST-SHARING SUBSIDIES SPENDING IS LOWER THAN PROJECTED: While neither Jonathan Chait nor Stephen Moore adequately address federal spending on premium tax credits and cost-sharing subsidies, the CBO DOES. These outlays are projected to be DOWN from prior CBO estimates, so you would think that Jonathan Chait would have jumped on them, but he didn’t and if you read the CBO report you can see why.
The CBO “…reduced their estimate of average enrollment over the course of 2015 by 1 million people, from 13 million to 12 million,” (CBO, 1/15/15, page 11). Jonathan Chait’s declaration of victory that “Obamacare has increased enrollment in its health care exchanges to more than 11 million,” (Chait), is therefore not only less than what the CBO projected (although pretty close so kudos to the CBO), but the CBO projects that “…for 2016, CBO and JCT have also revised downward their estimate of average enrollment through exchanges,” (CBO, 1/15/15, page 13).
The CBO also informs that “Lower estimated enrollment in coverage obtained through the exchanges in every year accounts for the majority of the $28 billion reduction in the estimated cost of premium assistance tax credits,” (CBO, 1/15/15, page 11). This would not support an Obamacare-is-working scenario since Mr. Chait emphasizes as do most liberals, the getting- people-covered goal of Obamacare and therefore savings from lower enrollment than was projected are not supportive of Mr. Chait’s argument.
Cost-sharing subsidies are projected to be lower too, but Jonathan Chait can’t put a possible Obamacare-is-working spin on that, so he omits it.
There’s more bad news on the premium tax credits, cost-sharing subsidies front from the CBO. The CBO has lowered its projections of how much COST-SHARING SUBSIDIES will cost as well, “Outlays for cost-sharing subsidies over the 2015–2024 period are currently projected to be $39 billion less than previously estimated, primarily because CBO and JCT now expect that more people will forgo those subsidies by choosing to enroll in a bronze plan instead of a silver plan,” CBO, 1/15/15, page13. As the report explains, “…eligible low-income individuals must enroll in a silver plan to receive cost-sharing subsidies,” (CBO, 1/15/15).
According to the CBO, why is money being saved on cost-sharing subsidies? BECAUSE “…data suggest that a significant number of people are selecting plans that minimize their monthly premium payments, even if the amounts they ultimately pay for health care (including out-of-pocket payments) exceed what they would pay under silver plans,” (CBO, 1/15/15, page 13).
People are purchasing WORSE health insurance,meaning that provides less coverage protection because their premiums for coverage EVEN WITH premium tax credits are too high. Therefore we’re getting more people who are UNDER-INSURED, who are in financial peril if they become sick, one illness away from financial ruin. Hardly an Obamacare-is-working scenario.
IS THE GOVERNMENT ACHIEVING ITS FISCAL TARGETS FOR DIRECT HEALTH INSURANCE COVERAGE EXPENSES WITH RESPECT TO A COMPARISON OF CBO PROJECTIONS TO EXPERIENCE SO THAT WE CAN RELY ON CBO PROJECTIONS MOVING FORWARD? Yes and no, but federal spending projection errors are significant for consumers.
Next, “The last Happy Graph, Healthcare Costs Per Capita: Part IV of, “Obamacare and Healthcare SPENDING, Chait v. Moore.”
