CBO: Big Drop in Health Coverage Unlikely

Merrill Goozner

Posted 3/15/12 in The Fiscal Times

Hey, I’ve been misquoted!

It’s an age old complaint. P.R. battle-hardened public officials and celebrities usually roll with the punches when their comments are yanked out of context. You’d think the non-partisan Congressional Budget Office, whose reports get waived around by partisans of every political stripe, would do the same. Someone misquoted a CBO report? Par for the course.

But the latest blasts from Republican officials and some press accounts lambasting “Obamacare,” a.k.a. the Affordable Care Act or health care reform, which used the CBO’s latest update on its projections for the law’s costs and effects, provoked an unusual response from the agency.

The anti-reformers say the CBO’s latest projections show a massive increase in the number of people whose employers will drop coverage due to the law. One report highlighted a “worst case scenario” to claim up to 20 million people could lose coverage.

Not so, says the agency. “CBO and the staff of the Joint Committee on Taxation (JCT) continue to expect the Affordable Care Act (ACA)—the health care legislation enacted in March 2010—will lead to a small reduction in the number of people receiving employment-based health insurance,” Director Doug Elmendorf wrote on his blog. “Some observers have expressed surprise that CBO and JCT have not expected a much larger reduction given the expanded eligibility for Medicaid and the subsidies for insurance coverage purchased through health insurance ‘exchanges’ that will result from the ACA.”

When the bill was passed, CBO estimated about 3 million out of the 160 million who currently have employer-based coverage would wind up in exchanges. The reason? Some employers would find it cheaper than buying their own plans. In their latest update, CBO changed that estimate to “3 to 5 million.” Why the uncertainty? The original estimate looked at 2019. The update extends the analysis to 2022.

Either way, CBO’s overall conclusion remains the same. “In CBO and JCT’s judgment, a sharp decline in employment-based health insurance as a result of the ACA is unlikely and, if it occurred, would not dramatically increase the cost of the ACA,” Elmendorf wrote.

And what about that worst case scenario? Like all ten-year projections, CBO comes up with both best and worst case possibilities. Alas, no one wrote a press release pointing out that CBO also said that under optimal conditions, 3 million additional people will gain employer coverage under reform.

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