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Dan Crippen: Why the CBO’s health bill numbers matter — even if they’re imperfect

Mar 24, 2017 | Health Care

Dan Crippen served as the director of the Congressional Budget Office from 1999 to 2003 and is currently a member of the board of the Committee for a Responsible Federal Budget. He recently wrote an op-ed for the Washington Post. It is reposted here.

The Republican health-care plan is hurtling toward a vote in the House Thursday despite pleas from Democrats to wait until estimates from the Congressional Budget Office are updated to account for amendments made to the bill (even though amendments are not routinely scored). This might not be surprising given Democrats’ opposition to the bill, but it’s notable given that numbers reported by the CBO have themselves become a singular element of the health-care debate over the past few weeks.

It’s not often that the CBO — which I led from 1999 to 2003 — makes major headlines. CBO reports are often met with the same level of excitement as a line at the post office.

In overly simple terms, the CBO paints a picture for what the world would look like if nothing changed for 10 years and what the world would look like under proposed legislation. But this is an imperfect science, and lawmakers would do well to remember that.

The Affordable Care Act’s primary purpose was to expand access to and coverage by public and private health insurance. The central goal of the Republican plan is to reduce federal spending on both public and private insurance and to provide more options for states to manage, and citizens to choose, insurance. It should surprise no one that the CBO thus estimates an increase in the number of uninsured under the Republican plan.

But the projections get tricky, as both estimates are built on many assumptions. In this situation, analysts must use all the available evidence and their best judgment to predict the future behavior of individuals, health-care providers, insurance companies and the response of states — all over the next 10 years. These assumptions are always subject to legitimate questions, and others may simply differ.

Take, for example, the assumption about the behavior of states on Medicaid. This is a fundamental component of the CBO’s analysis, which states: “The reductions in insurance coverage between 2018 and 2026 would stem in large part from changes in Medicaid enrollment.”

When evaluating current law, we must ask whether states would continue to expand Medicaid as they did under the ACA. Thus far, 31 states plus the District have done so and seven more states were seriously considering expansion before the election. It is not unreasonable, when making assumptions about how the world would look with no congressional intervention, to assume that these states would be joined by others.

But how many others? Is it likely that all 50 states would expand Medicaid under the ACA over the next 10 years? Would there be two or three — or more — states that dig in their heels and continue to refuse to expand?

Between now and the end of next year, 38 states will hold gubernatorial elections, in which more than half will have open seats. It is far too early to predict the electoral environment, let alone who might run and who is likely to win. Each of these new governors will almost certainly change the calculus on the Medicaid expansion question. The CBO doesn’t consider future elections, so this reality is not a part of its equation.

These questions — which can only be answered with their best analysis — are just the tip of the iceberg. There is little doubt that the proposed plan will reduce the expansion and increase the number of uninsured. But by how much? Do all seven of the possible expansion states now abandon their plans? How many states that initially chose expansion drop out? Given enhanced state flexibility over the program coupled with capped payments, will states cut, maintain or expand eligibility?

If you asked Republicans in Congress these questions, you would get one answer. Ask Democrats, and you’ll get another. The director’s job is to keep the CBO out of politics altogether and allow the office to do its best to analyze how things might unfold.

The CBO analysis brings critical information to the health-care debate, but the exact numbers (for example, that 14 million quickly would lose coverage if Medicaid changes and the individual mandate is repealed) are almost certain to be wrong to some extent. The CBO makes this clear, acknowledging that “comparison of projections with actual results and the great uncertainties surrounding the actions of the many parties that would be affected by the legislation suggests that the outcomes of the legislation could differ substantially from some of the estimates provided here.”

When dealing with contentious pieces of legislation, there is almost always a side that is pleased with the CBO’s analysis and a side that is not. But the institution of the CBO should not be the object of the debate.

Rather than spend our energy criticizing or endorsing a number that is by its very nature uncertain, we would be much better off spending the time, attention and media coverage debating how to provide better health care — especially for the most vulnerable — and to reduce costs before they become unaffordable.

"My Views" are works published by members of the Committee for a Responsible Federal Budget, but they do not necessarily reflect the views of all members of the Committee.