The Congressional Budget Office (CBO) on Monday released its score of the Senate Republicans’ health care reform bill, called the Better Care Reconciliation Act. CBO estimates the bill will cut the federal deficit by $321 billion by 2026 but increase the number of uninsured by 22 million compared to current law, the Affordable Care Act (ACA), which requires Americans to purchase health insurance.
Premiums, which have more than doubled for most Americans since the Affordable Care Act was enacted in 2010, would be 30 percent lower in 2020 than they would be without reform, according to CBO.
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“The new CBO score states that ‘in 2018, 15 million more people would be uninsured under this legislation than under current law–primarily because the penalty for not having insurance would be eliminated.’ Think of the logic behind saying the bill is causing the uninsured to increase by liberating people from the coercive mandate to buy it–which is what the American people want. Are those uninsured the result of the bill, or the result of decisions people are liberated to make in the market?
“Most of the rest of the uninsured in the CBO score stem from reversal of the Obamacare Medicaid expansions, which is the foundation for the trillion dollars in spending saved under the Republican bill. Studies show health outcomes for those on Medicaid are no better than for those who are uninsured. Medicaid coverage is not a solution for the uninsured. The CBO analysis does not take that into account.
“The Senate Republican legislation has its own plan for covering the uninsured, very different than coercion or wasting more trillions on Medicaid. As the CBO score states, under the Senate Republican legislation, ‘in 2020, average premiums for benchmark plans for single individuals would be about 30 percent lower than under current law.’ Lower premiums change the decisions the otherwise-uninsured would make in the marketplace. That is a clue as to where health policy should be going.
“Instead of coercion to buy insurance the uninsured do not want to buy, or wasting more trillions on Medicaid, policy should be focused on lowering premiums and expanding choice.”
Mr. Ferrara is the author of Power to the People: The New Road to Freedom and Prosperity for the Poor, Seniors, and Those Most in Need of the World’s Best Health Care (2015) and The Obamacare Disaster (2010).
“The CBO’s score confirms the Senate is rearranging the deck chairs on the Titanic with the Better Care Reconciliation Act, just as the House did with the American Health Care Act. Even Obamacare architect Jonathan Gruber concedes the Senate bill aims to repair, not replace, the Affordable Care Act. “The CBO score, along with most of Congress, perpetuates the myth that having insurance implies having access to affordable health care. Obamacare insurance is too expensive to use. Many stand to gain by losing their Obamacare coverage. “People could buy better, cheaper health care by ceasing to use health insurance to pay for non-catastrophic care. Unfortunately, most Democrats and too many Republicans insist on making insurance central.”
“The CBO and most pundits not only confuse ‘coverage’ with care but also confuse coverage with insurance. Insurance is supposed to enable you to voluntarily share the financial risk of a catastrophic loss, such as a fire, with similarly situated others, for a reasonable premium. Obamacare forces everybody to put a huge chunk of money up front into a management company, irrespective of risk. The manager (‘insurer’) pays contractors to water the lawn, paint the garbage can, and perform and extensively document other prescribed functions, but may or may not pay for repairs if you have a fire–and it will decide on the type of repairs and who does them.
“People who are on ACA plans or Medicaid are poorly insured, but their health plan may be richly covered with premiums and taxpayer subsidies. Its administrators will be better paid than heart surgeons, and far more abundant than nurses. For some reason, people believe the CBO’s figures, even though they are always wrong. In this case, CBO is not even counting the right things.”
“No legislative reform should be viewed in a vacuum, as if the instant changes are all that will be affected. The reality is that every legislative action has intended and unintended consequences, and the best that well-intentioned lawmakers can do is make an honest guess about the future.
“With this in mind, I do believe the greatest and most valuable good that can come from the Senate and House Obamacare reforms is beginning the process of restoring the right of states to regulate health insurance and sending a signal that states’ rights are back in vogue.
“The CBO’s best guess–that 22 million individuals will not be covered that otherwise would be–is just that: a guess. It does not account for the increased innovation offered to state lawmakers, governors, and insurance-purchasers. In contrast to the CBO, it is just as likely that a robust debate at the state level and a subsequent increase in economic prosperity will greatly reduce the uninsured rolls while increasing the joy of employment and providing for one’s own needs.”
“Of the 22 million additional uninsured in 2026, about 15 million of those will be uninsured because they are no longer eligible for Medicaid and lack access to affordable coverage in the individual market. An additional seven million will be composed of Americans who choose to be uninsured because they are no longer being forced to buy overpriced Obamacare plans that are a poor value. Most of those would likely enroll in coverage if affordable coverage were available.
“The bottom line is that most of the newly uninsured under the Better Care Reconciliation Act can be blamed on the Affordable Care Act provisions that prevent individuals from accessing health plans they can afford and are willing to buy.”
“The health care reform bill pending in the Senate would offer some improvements to the ACA while not serving as a full repeal. Eliminating the employer and individual mandate to buy an insurance product that contains minimal essential coverage would offer more freedom of choice to patients in terms of picking plans that meet the needs of their families at lower costs than the exchange plans. Without the mandates though, it is likely that the healthy will abandon the exchange plans for more cost effective options. This will effectively turn the exchanges into a national high-risk pool of high-expenditure patients which will not be sustainable by current premiums.
“Protecting pre-existing conditions is important and must be part of the final bill. The bill saves billions of dollars that could be used in other ways to make health care more affordable and reduce the deficit as shown in the CBO report. However, it is important to guarantee at least basic catastrophic coverage is affordable for those that would lose their insurance under this current plan. If it passes, this will offer patients more choice of how and who provides their health care including the freedom to choose a direct primary care model and not be restricted by narrow networks.”
“I have no confidence in the CBO estimates of the number of uninsured in 2026 (22 million) because their estimates for sign-ups for exchange coverage in Obamacare were so significantly off. They predicted 21 million in 2016 would be enrolled, but the actual number was 10 million. Also, the CBO does not take into account the fact that new insurers and insurance plans will likely be available if the Affordable Care Act is repealed and replaced. People would then be able to purchase coverage that suits their need and those of their families. What good is exchange coverage if the premiums are so expensive and the deductibles so high that one cannot actually use their insurance?”
“The Senate bill, Better Care Reconciliation Act (BCRA), is very similar to the House health care reform bill passed last month. It essentially eliminates the individual mandate, eliminates the expansion of Medicaid (over a longer time line), and offers more generous subsidies to people ages 18 to 64 based not only on age, but also on income and geography. The CBO scoring of the Senate bill is also very similar to the House bill. Both bills represent a good start at health care reform. Hopefully, enough moderate and conservative senators support the bill to get to 50 votes.”
“Health care is something you do for yourself (exercise, nutrition, family, friends, church, community, stress management), while medical care is what you seek when your health fails. One can have a right to health care, because that is what you do for yourself. But one cannot have a right to medical care, because that would necessitate coercion of others (indentured servitude). There is a right to seek medical care, however, and government has an obligation not to impede that right by distorting markets and thus limiting supply of medical services.
“The number of uninsured is a distorted and counterproductive yardstick if the goal is to improve affordability and access to medical care. The more medical insurance has been subsidized and coerced upon our world, the more collectivized, centralized, and dehumanized the medical system has become.
“The politicians have put financial companies–insurance companies focused on actuarial processes and collectivization of humans–in charge of medical care. That’s insane. Financial companies stink at medical care, and for good reason. Medical care should be an entirely individualized process, between doctor and patient. But insurance companies focus on statistics and numbers and groups. They can’t and don’t think in a manner amenable to individual patient care.”
“The most important thing to remember when interpreting estimates from the CBO is that it is essentially analyzing in a vacuum. While millions of Americans may lose their current insurance coverage, they do not account for the expectation that new insurance products should come onto the market which are more consumer-friendly to replace them. The CBO does not try to predict consumer behavior. We should remember that its projections for Obamacare were much rosier on paper than what actually happened in the real world.
“Neither the House nor the Senate version of the Republican reform goes far enough in supporting the introduction of free-market principles into the health care industry. The most cost-effective way to make not only health care coverage, but also actual health care services, affordable to the general public would be to: (1) allow for more choices in health care coverage, such as true catastrophic, high-deductible plans; (2) promote Americans’ use of health savings accounts, including allowing their use for membership in direct primary care practices; and (3) incentivize states to repeal certificate of need legislation so that privately owned diagnostic and surgery centers could break up the monopolies of large taxpayer supported hospital conglomerates.
“If these reforms were to be implemented, we should actually see a de-escalation in prices concurrent with a rise in quality and patient satisfaction. These reforms, combined with tort reform and revision of pharmaceutical patent law and regulations, could save Americans hundreds of billions, if not trillions, of dollars annually rather than over an eight-to-10 year period.”
“How accurate was the CBO scoring for Obamacare? Politicians use the CBO as an excuse for not restoring liberty to those who accept responsibility by earning the money needed for their care. CBO is not capable of calculating the economic impact of new policy because individuals react in their own best interest.
“Eliminating the mandate to purchase insurance must be accompanied by granting all workers the same tax advantage in purchasing care that employer-purchased insurance has enjoyed if a competitive market is to be restored. Premiums decrease as deductibles go up, but the total cost of care will continue to escalate.
“There are only two paths to restoring a competitive market. First is eliminating the tax preference for care, which I do not think is politically possible. The second is to make the same amount of tax-excluded dollars available to all workers apply toward the cost of needed care with a Health Financing Account (HFAs). Health savings accounts (HSAs) do not accomplish that goal. Principled conservatives should not support this legislation. Take the time to get it right.”
“The CBO numbers on the future uninsured make the assumption that under ACA they will stay static. This is a flawed and rosy assumption given the current ACA death spiral. Left alone, the ACA will continue to implode via rising premiums and fewer insurance options until there are no reasonable options available for those currently insured through the Obamacare exchanges. This alone will increase the number of the uninsured.
“Under either the Senate or House bills, the number of uninsured will also rise because many will choose no insurance rather than be forced to buy insurance. When given the freedom to choose between purchasing insurance and going uninsured, the rational choice for many Americans is to go uninsured. The ACA takes away this right, and the latest congressional bills restore that right to its citizens. What does this say about how these Americans feel about being forced to buy insurance?”