Senate Republicans just delayed a vote on their health care bill. The decision came less than a day after the Congressional Budget Office officially “scored” the bill and found that 22 million people would lose coverage if the legislation passes.
There are plenty of reasons to object to the Senate bill, officially known as the Better Care Reconciliation Act. It keeps in place the Affordable Care Act’s income-based tax credits, albeit at less generous levels. It keeps many of the law’s premium-inflating regulations. And it preserves the Medicaid expansion for at least three more years.
A bad CBO score, on the other hand, is no reason to knock the bill.
CBO scores are relatively meaningless for two reasons. First, past CBO scores of complex health legislation have proved wildly inaccurate. So there’s no reason to believe that a new estimate will hit the mark. Second, and more important, the CBO uses an overly broad definition of “coverage” that excludes people who purchase no-frills, high-deductible health plans — or who choose to go without insurance, even though they can afford it.
As Senate Republicans revise the bill, they shouldn’t worry about how many people buy an arbitrary level of “coverage.” Rather, they should try to maximize access to health benefits — and then give people the freedom to choose what policies to purchase.
Modeling future insurance enrollment is a fool’s errand. In 2014, the CBO predicted that 24 million people would buy exchange plans in 2017. In reality, about 12 million enrolled. Two million of those folks have since dropped their coverage because they couldn’t afford ObamaCare’s exorbitant premiums — or decided that they didn’t want to pay them.
So people should take the CBO’s estimates with a mountain of salt — especially since the agency’s predictions rely on unrealistic baselines and assumptions.
Consider how the CBO reviewed the Better Care Reconciliation Act. The agency compared the proposal against its March 2016 projections for enrollment. At that time, the CBO predicted that 18 million people would enroll in ObamaCare plans in 2018.
In other words, the CBO’s evaluation of the bill assumed that exchange enrollment will surge 50% next year. That seems highly unlikely. Yet because of that assumption, if the Republican plan fails to attract 18 million enrollees in 2018, the CBO will declare that it results in a loss of coverage.
Consider how ridiculous that is. If all 12 million Americans who signed up for 2017 exchange plans kept their insurance under the Republican plan, the CBO would still report that 6 million people “lost” coverage.
Even if the CBO’s estimates were realistic and accurate, coverage is the wrong standard by which to judge health care reform.
Under the CBO’s definition, only health plans that cover 10 “essential health benefits” and at least 60% of enrollees’ expenses, on average, count as coverage. A 50-year-old man who buys a health plan that doesn’t cover maternity benefits, or a healthy 30-year-old entrepreneur who wants a cheap, high-deductible plan that takes care of major medical emergencies but not routine expenses, is considered uninsured.
The CBO also doesn’t distinguish between people who lack insurance because they can’t afford it and those who can afford it but choose to gamble with their health.
Imagine if we measured employment rates that way.
First, the CBO would define a job as “a full-time position with generous benefits.” Next, it would fail to differentiate between people actively seeking work and those who aren’t looking — such as stay-at-home parents, college students, retirees, and the disabled.
The result would be an unemployment rate of 40%, rather than the current 4.3%.
Fortunately, that’s not how we measure unemployment. Instead, unemployment is a gauge of access to work. How many people want jobs — any kind of jobs — but can’t get them?
Similarly, health reformers — and the CBO — ought to be concerned with how many people can affordably access health plans. Age-based refundable tax credits available to anyone without employer- or government-sponsored coverage could ensure that everyone could secure at least a high-deductible plan to protect them in the event of a health catastrophe. The House’s reform bill comes closest to implementing this vision, while the Senate leaves ObamaCare’s income-based tax-credit scheme largely in place.
ObamaCare failed to achieve universal coverage by forcing people to buy expensive, comprehensive medical policies that millions of Americans don’t need and can’t afford. Republicans ought to ignore the obsession with “coverage” stats and focus on boosting access to affordable health insurance.