Estimates from the Congressional Budget Office about the impact of Obamacare’s individual mandate is off by millions, according to a new report.
Editor at the Washington Examiner, Phil Klein, writes that the “scandalously off” estimates “had significant ramifications for healthcare and tax policy over the past decade.”:
CBO estimates about the importance of an individual mandate to a national healthcare scheme prodded President Barack Obama into including the unpopular provision into the law in the first place. The mandate projections also played a key role in President Trump's two major legislative initiatives. The fact that the CBO assumed 14 million could lose coverage mainly due to the elimination of mandate penalties helped kill the effort to repeal and replace Obamacare, while its later assumption that 13 million fewer insured individuals would mean less spending on subsidies from the federal government helped get the 2017 Republican tax cut across the finish line by improving the budgetary math. Yet those incredibly influential estimates now appear to have been wildly off.
This information was contained not in a major section of the report, or in news sources about the report, but in a lone footnote in the Centers for Medicare and Medicaid Services’ annual report on national health expenditure projections, according to Klein.
Remember that the scary “14 million would lose coverage” was based almost entirely on people voluntarily giving up their insurance because they no longer would be charged for going without. This new report from CMS shows that just 2.5 million more would forgo health insurance coverage in 2019 because the individual mandate was repealed and even fewer would be impacted after 2019.
As Klein reports, the individual mandate was included in Obamacare even though then-candidate Barack Obama opposed the mandate during the 2008 campaign. It was included in the legislation because the CBO and others estimated it was necessary to pay for older Americans by forcing the young — who don’t need as much health care — to pay into the system. The CBO estimates worked for the passage of the bill and against Republican attempts in 2017 to repeal and replace it. Then, CBO estimates saying 14 million would lose coverage (even though the majority would voluntarily give up their coverage) scared some Republicans from voting to repeal.
“While any CBO analysis of the Republican bills was likely to project large coverage losses due to the cuts to Medicaid and subsidies, if CBO had more realistic assumptions about the mandate, the numbers would have been significantly smaller, and perhaps left more room to convince centrist Republicans to get on board,” Klein wrote.
But, Klein notes, these misleading numbers ended up helping Republicans when it came time to pass President Donald Trump’s tax cuts in 2017. The CBO said 4 million fewer people would have coverage in 2019 because of the penalties, and 13 million fewer would have insurance over all — thus saving $338 billion.
The footnote in the annual report states there would be just “1.5 million fewer direct-purchase-market enrollees” because the mandate was repealed, and about “1.0 million fewer employer-sponsored-insurance-market enrollees.” The footnote also said Medicaid enrollment was “assumed to be unaffected.”
Klein, who’s spent a decade covering Obamacare, says “the CBO’s misfire on the individual mandate should be a major story.”
Obviously, it won’t be. One, because few people talk about Obamacare anymore since it has become so entangled in our health care system, and two, because the left-wing media isn’t going to give up one of its favorite talking points.