Partisan Creep? CBO and Obamacare

How is it that the Congressional Budget Office’s most recent release, “Updated Budget Projections 2015-2015,” Pub. 49973, page 19, “Appendix: Updated Estimates of the Insurance Coverage Provisions of the Affordable Care Act,” inspired headlines focused on Obamacare Premiums costing less than previously predicted? For consumers, this is probably one of the LEAST useful pieces of information that are contained in the report.

For consumers, while we know Obamacare is law we also know it is not carved in stone. It’s a law that’s already been changed many times by Congress, the Supreme Court and administrative action.

While there are at least two categories of problems that have emerged with the Affordable Care Act, one in the implementation of the law and the other with the law itself, it is the latter that is of greater concern because these problems with the law itself cannot be “fixed” by giving the government time to work out problems, such as how fast a website works, but are instead problems with no good solution for consumers under the current law.

It’s the reason there’s popularity for the idea of repeal and replace or “repairing” the Affordable Care Act. It’s the reason that PR for the Act has been relentlessly and ever-more-desperately seeking to publicize THE GOOD NEWS about Obamacare.

It’s also the reason I’m calling out the self-proclaimed non-partisan CBO for possible partisan creep in its March 2015 published Appendix based on the popular preference for headlines about PREMIUMS DROP in certain headlines (I don’t usually read the articles after reading misleading headlines, so maybe their coverage is better than their headlines).

The fact that these articles are plentiful indicates to me indicates that perhaps the CBO used language that tended to cloud rather than clarify. I believe it did. Here’s what the CBO DID say:

“…slightly lower estimate of the number of people who will gain insurance coverage because of the ACA,” (CBO, Pub. 49973, page 19).

That CBO choice of language is remarkably unclear compared to almost anything else its authors might have used such as, “Remember the 47 million uninsured? Not So Much,” or, “Oops! Our Bad, There Never Were 47 million Uninsured.”

Now if enrollment hadn’t emerged amidst the now blemished history of the Affordable Care Act as the last bastion of “maybe it will help consumers” and hadn’t been focused on by the government so strangely (for example, with every number crunched by the government somehow the number of newly insured remains a changing estimate), then maybe the CBO wouldn’t have hesitated in informing that there were fewer uninsured than we’d previously been told there were.

“…[S]lightly lower estimate of the number of people who will gain insurance coverage because of the ACA,” (CBO, Pub. 49973, page 19). To me it appears that the CBO chose purposely unclear language.

It appears to be a parlor trick, much like talking about costs to the federal government of health insurance coverage only provisions rather than an attempt to calculate the full budgetary effects of Obamacare which conveniently omit associated costs of the law to the Federal government.

Similarly, by deciding to reduce the number of people who were uninsured before the ACA, suddenly it’s possible for the CBO to make Obamacare seem more successful in terms of the percentage of uninsured who gained health insurance because of the law while explaining that fewer people are enrolling than they thought because there were fewer people who needed health insurance in the first place.

The Medicaid reasoning is even more obtuse. In January, the CBO projected that Medicaid costs to the Federal government would be higher than previous projections because there were significantly MORE newly eligible Medicaid enrollees than the CBO had projected and that would raise the payments for the federal government because the federal government pays MORE for new enrollees under expanded Medicaid than for other Medicaid enrollees.

In January, the CBO stated: “…that the estimated proportion of Medicaid enrollees who were newly eligible under the ACA was larger than expected,” (CBO, Pub. 49892, page 11) which meant that “For 2015 and beyond, the agencies currently expect that roughly 70 percent of the people who will receive Medicaid coverage because of the ACA will be newly eligible for the program” (CBO, Pub. 49892, page 13) and “Federal costs per Medicaid enrollee are much higher for those who are newly eligible than for those who were previously eligible because the federal government pays a larger share of the costs for newly eligible enrollees (CBO, Pub. 49892, page 14).

In March, the CBO states: “Because Medicaid enrollment before the coverage expansion under the ACA turned out to be higher than CBO and JCT anticipated, the pool of people who would have been eligible for Medicaid but not enrolled in the program before the ACA expansion is now estimated to be smaller (and therefore the pool of people who would be likely to be eligible but not enrolled in the future in the absence of the ACA would be smaller) and thus a somewhat smaller number of people are projected to enroll in Medicaid because of the ACA,” (CBO, Pub. 49973, page 22).

This seems to say that because FEWER PEOPLE WHO WERE ELIGIBLE FOR MEDICAID HAD NOT ENROLLED IN MEDICAID BEFORE THE ACA EXPANSION THAN THE CBO THOUGHT, again, FEWER PEOPLE WERE UNINSURED THAN THOUGHT. But remember, there are two kinds of Medicaid enrollees considered by the CBO, the newly enrolled which cost the Federal government more money and those who had not enrolled but could have before the ACA.

The CBO seems to be addressing the numbers of individuals who could have but did not enroll in Medicaid BEFORE Medicaid expansion, meaning those who could get Medicaid coverage all along but hadn’t. Turns out THAT number the CBO now estimates was smaller than projected.

The CBO continues to project lower federal costs of Medicaid and CHIP under the ACA for the years 2016-2025 (an eight percent savings) and attribute that reduction to “…mostly the result of a downward revision to the estimated number of people gaining Medicaid coverage because of the ACA (as discussed above),” (CBO, Pub. 49973, page 23).

So, what is the CBO saying about the Medicaid expenditures it warned had been higher than expected before because of the larger numbers of newly enrolled in Medicaid than anticipated that would raise the Federal price tag? It appears those people and the increased expense to the Federal government remain steady BUT by saying that fewer people who WERE ELIGIBLE BEFORE THE ACA HAD NOT SIGNED UP FOR MEDICAID, the CBO indicates estimates of covering those ALREADY ELIGIBLE BEFORE OBAMACARE BUT WHO HADN’T SIGNED UP was less and so would cost less to the Federal government.

It is a big deal for the Congressional Budget Office to indicate that one of the chief justifications for Obamacare, the number of uninsured is a number that is now being recalculated and reduced making it lower than the 47 million we were told for two reasons: FIRST, it means that although projections for enrollment in Obamacare plans have moved lower with each CBO projection, this is explained away because obviously if fewer people were uninsured to begin with, fewer people would need health insurance. Second, if the number of individuals who were uninsured is lowered than whatever the guessed at number of newly insured is becomes a larger percentage of the UNINSURED WHO GAIN COVERAGE than if the original number of 47 million is used.

It’s a way of making Obamacare seem more “successful” in terms of its enrollment goals by changing the original number of uninsured.

But there’s a THIRD reason that lowering the number of people who were uninsured to begin with matters, and that’s the confirmation that we were likely SOLD Obamacare at least partially through an OVERSTATEMENT OF THE PROBLEM. Perhaps this is why the headlines omitted this bit of news.

For consumers, the WRONG information we were fed for years about the number of uninsured that at least partially influenced the adoption of Obamacare is a big mistake and the decision by the CBO to use unclear language to disclose that it will USE that mistake to recalculate the ongoing costs of some of the provisions of Obamacare to make the law seem more fiscally responsible is a double whammy…First, it’s another reason to distrust the original law and second, it’s a reason to distrust the CBO’s language that tends to obfuscate rather than clarify.

The CBO has essentially said that because more people had health insurance than the American people have been told for the last at least seven years that the number of uninsured before Obamacare was actually fewer than we were told. Using this smaller number, the CBO then justifies enrollment numbers in exchange plans that are lower than it thought they would be as simply an error they made because they assumed more people needed health insurance than did so fewer people needed to buy health insurance. Then they piggyback the fact that without changing enrollment numbers they can improve the percentage of people insured because of Obamacare because 11 million is a greater percentage of a number that is less than 47 million than it is of 47 million (the number we’ve been fed for years as the number of uninsured).

For consumers reciting guessed at numbers of the “newly insured” as fact becomes even less credible in the wake of CBO’s choice to keep changing the numbers it’s using as its BASELINE.

Turns Out the Number of Uninsured was Overstated: Obamacare

The CBO NOW says that they’ve managed to come up with PROJECTIONS that show Obamacare will be even CHEAPER for the Federal government in terms of paying for consumer healthcare insurance coverage only costs for 2016-2025.

SINCE JANUARY, the CBO has crunched some numbers and decided that the government costs of Obamacare (only what they spend on consumers, not what they spend in connection with Obamacare for federal jobs, et cetera) for the years 2016 to 2025 will be 11 percent LOWER than they projected in January! (Pub. 49973, page 19).

The CBO March 2015 Publication 49973 identifies TWO REASONS: FIRST, “Downward revision in the projection of health insurance premiums that led to a lower estimate of the costs of subsidizing health insurance through the exchanges, and…”

SECOND “…a slightly lower estimate of the number of people who will gain insurance coverage because of the ACA,” Pub. 49973, page 19).

OK, so the government outlays for premium assistance are lower because insurance company premiums have not gone up as much as anticipated AND because of lower enrollment than projected.

Lower growth in premiums, that’s an Obamacare win, right? NO. First of all premiums aren’t LOWER, they’re INCREASING more slowly than anticipated. That’s a big difference. So why are increases in premiums occurring more slowly especially since we KNOW that healthcare PRICES for services are up?

The long and short of it is that the CBO doesn’t know: “PROJECTIONS OF SPENDING BY PRIVATE HEALTH INSURERS ARE HIGHLY UNCERTAIN, ESPECIALLY BECAUSE THE CAUSES OF THE PRONOUNCED SLOWDOWN IN SPENDING IN THE PAST SEVERAL YEARS ARE NOT WELL UNDERSTOOD,” (Pub. 49973, Page 21).

Not only doesn’t the CBO know the reason for the slowdown but it acknowledges that the slowdown happened PRIOR to Obamacare exchanges by several years: “Spending by private health insurers on health care and administration rose less in 2013…and by much less than the agencies had expected for 2013,” (page 19). The trend the CBO observes didn’t begin in 2013, but as the CBO says, “relatively slow growth that had begun some years earlier,” (Pub. 49973, page 19.)

We have an idea of why premiums are going up slower and if Obamacare was working, there should have been a premium DROP since the trend of insurance companies lowering premiums by raising deductibles, copayments and coinsurance payments, the out-of-pocket costs paid by consumers have increased drastically over the past several years in combination oftentimes with less overall coverage of needed medical services (as compared to the checkup).

You would think premiums would be going DOWN as our share of out-of-pocket increases, but no, taking away coverage and making consumers pay more has only SLOWED the INCREASE in premiums charged.

The CBO confirms what we know when it talks about an anticipated 8.5 percent INCREASE in premiums for Obamacare plans in the years 2016 to 2018 as the government finds “…many plans will not be able to sustain such low provider payment rates or such narrow networks over the next few years, placing upward pressure on exchange premiums,” (Pub. 49973, page 21).

So, having to provide sufficient provider choice and an inability to function as a group health plan (another Obamacare myth) with the superior negotiating rights of such plans based on the promise of customers, will lead to a spike in Obamacare plan premium prices.

The SECOND reason the CBO says the government will save money on health insurance coverage (payments on behalf of consumers rather than other expenses for new staff, et cetera in the Federal government), is that FEWER PEOPLE DIDN’T HAVE HEALTH INSURANCE THAN WE WERE TOLD. The whole justification for this miserable shift-law called Obamacare turns out wasn’t quite what we were told.

The CBO says the costs of insurance coverage only provisions for 2016 to 2025 will be lower because “…somewhat fewer people are now projected to gain insurance coverage because of the ACA, because CBO and JCT estimate that fewer people would be uninsured in the absence of the ACA…” (Pub. 49973 page 22).

Using this REVISION DOWNWARD OF HOW MANY PEOPLE WERE UNINSURED TO BEGIN WITH, the CBO says that since there were fewer people uninsured BEFORE the ACA than we were led to believe, ENROLLMENT of NEW people via exchanges or Medicaid will also be lower than projected.

This sudden lowering of the INCREASE in Medicaid spending specifically discussed in January by the CBO: “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. Roughly half of the upward revision reflects an increase in the estimated share of people enrolling in Medicaid under the ACA who will be newly eligible…Federal costs per Medicaid enrollee are much higher for those who are newly eligible…because the federal government pays a larger share of the costs for the newly eligible…” (CBO, 1/15/15, page 13) is ALSO LOWERED BECAUSE: "That change is mostly the result of a downward revision to the estimated number of people gaining Medicaid coverage because of the ACA,” Pub. 49973, page 23.