Looking through the CBO letter about the Baucus bill, there is one striking fact that most of the media is overlooking. The CBO claims in the report that they did not score the full bill. They admit to completely ignoring a huge provision that is projected to reduce the cost of the bill by roughly $44 billion, but would deprive millions of Americans of health insurance. The paragraph below, from page 8, has been widely criticized, but it is the start of the next paragraph (that I highlight) which should get more attention.
An amendment adopted by the committee would require that, beginning in 2012, the Director of the Office of Management and Budget (OMB) certify annually whether or not the provisions of the legislation are projected to increase the budget deficit in the coming year. If the Director determined that they were projected to increase the deficit, he or she would be required to notify the Congress, and exchange subsidies would be automatically adjusted to avoid the estimated increase in the deficit for that year.
The estimates presented in this preliminary analysis do not incorporate the potential effects of using this proposed failsafe mechanism, although CBO and JCT estimate that the amended mark would increase the deficit in fiscal years 2015 through 2018.
This means the CBO analysis being widely reported does not come close to reflecting the real cost of the bill, or the real increase in coverage. For some reason, the CBO did not report what they expect to be $44 billion in savings.
Looking at CBO chart on page 3: in 2015, money going to affordability tax credits would need to be cut by $10 billion (13%). In 2016, they would be cut by $20 billion (21%). In 2017 the cut would be $13 billion (8%), and in 2018 the cuts would only $1 billion (1%).
Depending on how the cuts to the affordability tax credits were structured, there would between one and six million more uninsured Americans each year from 2015 to 2017 than the CBO letter indicates. The preliminary CBO analysis did not “incorporate” this $44 billion in savings or the several million increase in the number of uninsured Americans.
I suspect this incredibly stupid “failsafe mechanism” will not make it into the final bill, but the CBO still should have scored this huge provision. It is currently part of the bill. The job of the CBO is to score the whole bill, and not to ignore provisions that would make the bill look bad.
I’m highly disappointed with the institution of the Congressional Budget Office. They must have known that their preliminary analysis would be widely reported without more critical examination. Sadly, the CBO report makes clear only on page 8 that their score does not come close to really modeling the effect of the passing the legislation they were given into law.




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Are we familiar with the inner workings of the CBO? “Non-Partisan” just doesn’t cut it as a description that makes say “OK! I trust them!”
Who’s in it? Who picks them? Who do they report to?
I get the feeling the CBO is another scandal waiting to happen like the so called “Rating Firms” for the Financial Industry who were supposed to be independant but where actually paid by the banks!
Cut me off if I way off base on this one.
Well it would seem to me CBO might’ve given a reason for ignoring this amendment. It’s possible to surmise, however, that they scored only the parts that provide coverage. Savings achieved by leaving people uninsured cannot be considered valid in the context of health insurance reform aimed at getting more people insured. It’s just a hunch, tho.
What. A. CLUSTER—-.
Are these people REALLY running this country?
The CBO is not told to score concepts in bills, they are told to score bills.
Um, didn’t Baucus rule Wyden’s amendment out of order because, he alleged, the CBO hadn’t fully scored it?
Another big helping of WTF?
Why only score part of a bill for what possible reason do you not score an entire bill unless you are hiding something?
Very good point!
I think you are on to something here. Didn’t the CBO lie to Congress about some Bush era healthcare thing?
I take it, then, that no reason was given for not doing this bit.
Thx. Kind of like Rove had “THE Math”, it would appear that Baucus has “THE Logic”. Or is that TEH Logic?
Does this mean that people would be cut off or that those who are having their premiums subsidized would be receiving less of a subsidy?
Subsidies could be reduced by a lot or cut off completely to some people in any year. Year 2016 is expected to be the worst.
Jon, your earlier post about the number of medical bankruptcies got me thinking about framing. Is there anyone/place working hard on frameshopping these bits. Death Panel is killing us. Murder by spreadsheet was/is a great success.
Good candidates for the sharper wits (Punaise comes to mind) among us seem to be all around us:
from your last post: medical bankruptcy
from this post: what should we call those-without-health-insurance other than the uninsured?
I thinks its more like Baucus has his own version of its ok if your a Republican. But yes I get your point entitlement entitles people like Baucus to their own facts which justify why the rules don’t apply to them.
We peasants of course can’t handle truth only Geniuses like Baucus and Bush can.
Is the CBO becoming more politicized? By that I mean, skewing or shading their analysis to push legislation one way or the other. I’ve never paid much attention, but I was under the impression their analysis was above reproach.
It would be the government payout, i.e., the subsidy — which would go straight into the accounts of the health insurance company — that would be adjusted downward when there’s a deficit. I suppose there’s language involved that mean such cases would be without insurance, since they can’t afford the insurance without the subsidy. Said language must include an exception to the mandate to buy insurance under this regime.
Thank you for this reporting. It’s important to be able to evaluate the legitimacy of the analysis of the CBO.
…which begs the question, who benefits from this system of inaccurate and/or incomplete CBO reports?
See my comment at 8 but yes something seems funny.
Would then be seen as a reason to allow the insurance companies to raise their rates universally?
Yeah. The thing is that so much of the government was politicized during the odious Bush years that it is reasonable to expect that the CBO was affected as well. And if the CBO was not politicized during those 8 horrible years, shame on the Bushies for creating an atmosphere in government that makes us suspect polticization.
Once again, especially if your Senator is on the Finance committee, we all need to call the Dems who aren’t explicitly in the insurers pocket and insists they vote NO on the Finance committee bill. I called Kerry’s office for probably the twentieth time this morning and it was the first time I actually got a sense that they were not on autopilot heading for a YES vote. If you’re represented by Kerry, Wyden or Rockefeller call them and make it clear your not just calling about the public option. The whole bill is a disaster. The revenue component is awful and regressive, the coverage portions are terrible. The concessions to Pharma verge on the criminal. Tell them it is not just about the public option, the whole bill must be killed.
It’s funny how the admininstration goes around talking about how they want everyone to be covered until they get behind absolute crap like the baucus bill. What am I to believe the lies spewing from their mouths or my own eyes.
As far as I can tell, the insurance companies will be allowed to do whatever they bloody like. What provision are you alluding to?
I still don’t understand what happened to the concept of taxing the rich to help pay for this.
Oh my poor brain is in need of a boost to grasp all this confusion, distraction and delay. Anyone recommend some specific brain boosts.
Did the CBO, what do they call this “score” all the Bushie budget busting policies? All these complications are good for one reason. We can see who is being payed off by the Health Insurance predators and the Pharmaceuticals, and of course Goldman Sachs. I hope someone is keeping a list of these unregistered corporate lobbyists.
That is probably the case since they wrote the crapus Baucus bill.
Jane has a fresh cross-post already in progress: “Public Option Please (POP): Because Health Care Is A Human Right”
Interesting. IOKIYB.