CBO Director Defends Agency: ‘Culture of Objectivity, Impartiality, Nonpartisanship’

Jason Reed/Reuters

The director of the Congressional Budget Office (CBO) is defending his agency as a bastion of unbiased “nonpartisanship” in light of criticism by members of Congress, financial media, and some physicians about the accuracy of its analyses of Obamacare and Republican proposals to repeal it.

Keith Hall said in a letter last week to Rep. Tom MacArthur (R-NJ) that CBO takes steps “to ensure that its work is objective, impartial, and nonpartisan.”

In May, MacArthur criticized CBO for its response to his amendment to the American Health Care Act (AHCA) that allowed states to opt out of an Obamacare insurance mandate known as community rating, which prohibits insurers from charging individuals with pre-existing conditions more money.

CBO claimed MacArthur’s addition would force individuals with pre-existing conditions to pay higher premiums and eventually cause them to lose health insurance, an outcome that could result in the individual markets in those states that opted out of the mandate to become unstable.

“I don’t agree with them that waivers will destabilize it,” MacArthur said, reported the Washington Examiner. “I think waivers will cover people with pre-existing conditions because they will have to create risk pools.”

“I respect the CBO’s role, but just because a group of auditors down the block has created a model with ifs ands or maybes that doesn’t make it a gospel,” the congressman added. “That is somebody’s opinion at CBO.”

Hall replied to MacArthur, explaining how CBO conducts its analyses:

In general, CBO analyzes the potential effects of legislation by comparing what would occur under the legislation to its projections over the next 10 years of what would occur under its baseline, which generally follows current law. For health insurance coverage, the construction of the baseline starts with data on recent experience and projects how rates of coverage and sources of insurance would change federal costs as a result of alterations in people’s incomes and net costs for various insurance options—accounting for market prices, eligibility for subsidies, and subsidy amounts.

Recently, CBO released a report that declared ending bailouts to insurance companies would increase the deficit by $194 billion over 10 years.

The cost is “eye-poppingly large,” said Nicholas Bagley, a professor of health law at the University of Michigan, according to NPR. “This single policy could effectively end up costing 20 percent of the entire bill of the ACA.”

“The CBO analysis makes clear that ending cost-sharing subsidies would be a perfect example of cutting off your nose to spite your face,” Larry Levitt, a vice president at the Kaiser Family Foundation, similarly said in response to the agency’s report. “Premiums would rise, and the government would end up spending more in the end through tax credits that help people pay their premiums.”

However, Jane Orient, M.D., executive director of the Association of American Physicians and Surgeons, which advocates for free market, patient-centered health care, disagrees.

“According to the CBO, spending less money would increase the deficit?” she says to Breitbart News. “What will it take to get people to ignore them? Their projections are almost always wrong – by a huge amount, and now they are becoming frankly absurd.”

Orient asserts that the concept that “more” insurance coverage is best is seriously flawed:

The problem with the insurance market is that there is no insurance market. The government dictates what companies can – must – offer, at a price guaranteed to lose money. And it isn’t insurance to begin with, just guaranteed prepayment for dubious access to care.

Too much “coverage” is the problem, and more is not the solution. Care is much less costly without the insurance middleman. If Congress is unwilling to repeal the ridiculous mandates that caused the problem, people should ditch the product, and insurers should pull out of the racket.

She suggests “honest price signals” and direct aid for those who are impoverished and need care.

“How about a tax credit for contributions to a charitable group that pays real medical bills, rather like state tax credits for contributions to organizations that give scholarships so students can attend the school of their choice?” Orient recommends.

Similarly, Gerard Gianoli, M.D., of Louisiana’s Ear and Balance Institute, tells Breitbart News the CBO’s analyses cannot be trusted.

“The CBO, who has been wrong at every prediction with regards to the ACA, now predicts that the government will pay more out in premium supports if they stop the cost-sharing program to insurance companies,” he states, adding:

Given that the states have to approve any increase in insurance premiums as it is, I don’t see how this is possible without tacit federal government approval. The insurance companies will more likely pull out of the exchanges for fear of losing more money, and the ACA exchanges will fail. I think this CBO projection is more akin to wishful thinking on the part of the CBO than any real analysis.

The contrast in media views of CBO is rather sharp.

Steven Rattner at the New York Times refers to CBO as “an agency of indispensable importance,” but in January Brian Blase noted at Forbes CBO’s “history of incorrect Obamacare projections,” and grouped the agency’s errors into two categories:

First, CBO projected that the exchanges would be stable by now with more than twice as many enrollees as they currently have, rather than suffering from severe adverse selection in most states as they now are. Second, CBO projected that the ACA Medicaid expansion would be much smaller and less expensive than it has turned out to be.

These errors were caused by two primary mistakes in CBO’s model and assumptions. First, CBO significantly overestimated the degree to which the individual mandate would induce relatively healthy people with middle class income to buy coverage in the exchanges. Second, CBO failed to anticipate that states would respond to the federal government’s elevated reimbursement rate for the Medicaid expansion by maximizing enrollment and paying insurance companies extremely high payment rates for this population.

Breitbart News’ John Carney also reported in July:

One area that has come under intense criticism is the CBO’s secret method for forecasting the number of uninsured. Health policy analyst and journalist Avik Roy has complained that the CBO appears to “ascribe near-magical powers to the individual mandate.” This causes the agency to vastly over-estimate the increases in the number of uninsured in any bill that removes the mandate, according to Roy. But the CBO refuses to disclose precisely what portion of the uninsured are those that would voluntarily drop insurance due to the lack of a mandate.

The statistic of “number of people who will be uninsured” is a particular favorite of left-leaning organizations and media.

In May CBO reported the House’s AHCA would “increase the number of people who are uninsured by 23 million in 2026 relative to current law.” Two months later, CBO declared the GOP Senate’s Obamacare repeal bill would leave 32 million more individuals uninsured in 2026.

“We continue to believe that CBO’s methodology is flawed, and this score fails to take into account the president’s full plan, which includes a replacement for Obamacare and administrative actions to reduce costs and expand access to quality, affordable care,” the White House said in a statement in response to the agency’s most recent analysis.

Progressive groups such as the American Medical Association continue to use the statistic of “number of uninsured” to their advantage because it deceptively implies that, with Obamacare, more people have actual access to health care. In reality, however, the statistic merely provides the number of individuals enrolled and carrying insurance cards.

Orient recently emphasized that Obamacare’s reported success by its supporters has been “based on enrollment numbers.”

She wrote:

Millions more have “coverage.” Similarly, the predicted disasters from repeal have to do with loss of coverage. Tens of thousands of deaths will allegedly follow. Activists urge shipping repeal victims’ ashes to Congress—possibly illegal and certainly disrespectful of the loved one’s remains, which will end up in a trash dump.

“Medicaid expansion may have alleviated fears of medical bankruptcy, but we don’t know that more patients got treatment,” Orient asserts. “In single-payer Canada, there is no fear of a medical bill. But there might not be any treatment either.”

CBO also reported in March that GOP plans to defund Planned Parenthood in health insurance legislation would result in “additional births stemming from the reduced access: to “services that help women avert pregnancies.”

“The number of births in the Medicaid program would increase by several thousand, increasing direct spending for Medicaid by $21 million in 2017 and by $77 million over the 2017-2026 period,” the agency stated.

Leftwing Planned Parenthood tweeted that CBO “reaffirms what we know: This bill is dangerous and must be stopped”:

In July, members of the House Freedom Caucus filed amendments to a spending bill to eliminate CBO’s Budget Analysis Division and instead direct the agency to evaluate data compiled by the Heritage Foundation, the American Enterprise Institute, the Brookings Institutions, and the Urban Institute.

“They’re the one group that makes a weatherman’s 10-day forecast look accurate,” said Freedom Caucus chairman Rep. Mark Meadows (R-NC) about CBO, according to the Washington Post.

Meadows added:

There’s plenty of think tanks that are out there. And so we ought to take a score from Heritage, from AEI, from Brookings, from the Urban Institute and bring them together for a composite score that would represent a very wide swath of think tanks and their abilities. We think that’s a pragmatic way to use the private sector and yet let Congress depend on a score that is accurate.

Rep. H. Morgan Griffith (R-VA) similarly said about CBO, “When someone gives you bad advice again and again, why would you trust them to help you make big decisions?”


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