On the CBO projections — and what the Senate’s health bill reveals about Republican preferences

I haven’t bothered railing at the Senate Republicans for crafting their McConnell/Trump health care bill in secrecy with no opportunity for input from Democrats (or even from most Republicans). We’re past the point where there’s much hope for compromise across party lines. The bill is nowhere near ready to become law, and most of us (certainly I) would need guidance from the Congressional Budget Office (CBO) to know how it differed from the existing Obamacare program and from the House version (which I call Ryan/Trumpcare).

So the draft of the bill is now out, and so is the CBO score. According to the CBO analysis, if the Senate bill becomes law and takes effect, by next year the ranks of the uninsured will grow by 15 million in the short term and then will keep rising to 22 million additional uninsured Americans in 2026. That’s compared to 23 million for the House version, which President Trump first hailed and now calls “mean,” presumably because of the rise in the uninsured. On that basis, the Senate bill is 4 percent less mean.

In other words, according to my lights and my values, both bills are (to steal from the title of the Judith Viorst book about Alexander’s day, “terrible horrible no good very bad” bills. But that’s just according to my values, and perhaps some among you likewise feel that reducing the ranks of the uninsured is a higher priority than cutting taxes for millionaires and billionaires. A bit more about that below.

‘Mandate’ would go

In the interest of fairness to the Republican approach, it should be noted that a large share of those who will end up uninsured will do so voluntarily, in a sense, because both Republican versions repeal the “mandate” contained in the Obamacare law that required most people to obtain insurance or else pay a penalty. At least according to standard conservative rhetoric, this mandate offends the conservative/Republican belief in “freedom,” in this case the “freedom” to be uninsured.

The hot-off-the-presses Senate version adopts a new approach to discourage people from going without health insurance. If you were to choose to go without coverage, and then try to get insurance after you got sick, the Senate version would allow insurers to refuse to cover you for up to six months. So your “freedom” to be uninsured bleeds right into the insurance company’s freedom to deny coverage to the already-sick. I’m not sure how to score this on a relative meanness basis. Perhaps Trump will enlighten us.

In the next few days you may hear some ritualistic Republican denunciations of the CBO score on the grounds that the CBO can’t really see the future and many of their past efforts to project the 10-year future of a proposed new law have turned out to be incorrect.

That is, of course, true. You could say the same about all the right-wing think tanks that Republicans prefer or left-wing think tanks that Democrats prefer, which will also try to describe the likely future impact of the bill. No one (other than Carnac the Magnificent) can accurately predict the 10- or 20-year future of such a complex matter. Everyone will get it wrong to some degree, and that includes the CBO.

CBO produces the best analysis we have

But the CBO is the best we have. It is a nonpartisan, nonideological outfit that works for Congress and was created expressly for this purpose: to analyze and project the future cost and impact of proposed legislation. And, like every other nondeity, its vision of the future will be more or less inaccurate. If you don’t like what it projects, you can dismiss it on that basis, but your motives for doing so will come into question.

The Washington Post, in its coverage of Monday’s CBO score, anticipated the inevitable whining about the score and included this paragraph:

“The CBO has been regarded over its four-decade history as a source of neutral analyses devoid of political agenda. Its current director, Keith Hall, is a conservative economist who served in the administration of President George W. Bush and was appointed to his current role two years ago by a Republican Congress.”

The New York Times decided to run a sidebar feature on CBO chief Hall that portrayed him as the most apolitical of number crunchers and said:

Congress intended the C.B.O. to serve as a nonpartisan provider of cost estimates and economic forecasts for nearly every piece of legislation that Congress considers. That makes the agency a lightning rod of criticism for both Republicans and Democrats when it says bills are going to be more costly to taxpayers than politicians had indicated. These days Mr. Hall and the credibility of his office have been under especially intense scrutiny because of the C.B.O.’s damning assessments of the health care bill that Republicans have been struggling to pass this summer.

Will it pass?

Two more bits of prognosticating, which the CBO won’t do but the punditocracy will, is whether the bill can pass and become law and whether the passage will help or hurt Trump and Republicans in their future endeavors to win elections. Nobody knows that either, and I won’t engage in it, but prepare to hear a lot of predicting and punditocratizing along those lines. (No, that is not a real word.)

If you haven’t figured it out yet, the often smart, well-intentioned people on those news panels who speculate on the future of such matters don’t know the future either and know even less than they used to think they knew before the year of Trump.

Here’s my view: I’m for single payer. The countries that have it (like Canada, but there are many others) have demonstrated that you can get the uninsured share of your population down to almost zero, spend less of your GDP on health care, and get significantly better results than the United States does in measures such as life expectancy and likelihood of dying of various treatable diseases. But it’s very bad for the for-profit insurance industry and other highly compensated players in the health care business. As a result, we may never be able to find out how well it would work in the United States. It might not work as well here as it does in Canada, for various reasons. But it definitely reduces the portion of the population that lacks access to health care.

I’m no expert on health care policy. I’m so simple-minded about it that I think reducing the share of the population that can’t get good health care should be one of the primary goals of a national health care policy. Republicans clearly disagree.

‘Revealed preferences’

On that score, I found very clarifying this piece by New York Times columnist Neil Irwin, who often focuses on economic news and economic thinking. It’s headlined: “The Health Debate Shows What Both Parties Care About Most.” Irwin introduces us to the economic concept of “revealed preferences,” which suggests that you reveal what you care most about less by what you say and more by what you do.

President Barack Obama and his partisan allies in 2009-10 cared more about reducing the uninsured share of the population than they cared about keeping taxes low on millionaires and billionaires and keeping profits high in the insurance industry. So their law raised taxes on the wealthy and increased regulations on insurers and doctors and hospitals all in ways that were designed to reduce the uninsured share of the population. And they succeeded in cutting that share roughly by half.

If you look at it from a “revealed preference” perspective, the Republicans in Congress care more about cutting taxes for the wealthy and improving the profit picture for insurers, and they are willing to uninsure millions of mostly poorer Americans to achieve that goal. That, quite bluntly, is the big tradeoff that both the House and Senate bill make.

Here’s another crack at that link to Irwin’s piece. I recommend it and wonder if you will likewise find it not surprising but clarifying. He notes that thanks to the various ways that the Republican bills reduce spending on health care, they are able to repeal wealth taxes that Obamacare imposed to make health care more affordable for the nonwealthy. He notes, for example, that, if the Republican passes:

A 3.8 percent tax on investment income over $250,000 for a couple would be history, as would an 0.9 percent surcharge on payroll tax above that same level. The Tax Policy Center estimates that would amount to an average tax cut of $54,000 for households making over $1 million.