TAXATION

CBO Has Become The Enemy Of Republican Health Care Reform

By LEWIS K. UHLER and PETER J. FERRARA

The Congressional Budget Office (CBO) scored the House Republican health care bill to repeal and replace ObamaCare as reducing federal spending (virtually all of it entitlement spending) by well over a trillion dollars ($1.111 trillion), cutting federal taxes by nearly a trillion ($992 billion), and reducing the federal deficit by over a hundred billion ($119 billion), over the next 10 years alone.

But that is where the CBO’s accuracy ends.

The bill would repeal ObamaCare’s individual mandate, recognized by the Supreme Court as a tax on the middle class, and the employer mandate, a destructive “tax” on jobs and wages, relegating millions of Americans to part-time jobs at lower wages.

The Republican bill is based on consumer choice and market competition, not central planning and Big Government. It would liberate working people and their families to choose the health insurance they prefer, either through their employers driven by labor market competition to serve worker preferences, or by individual workers using their Universal Health Insurance Tax Credit to help buy the health insurance of their choice.

This would fulfill an essential promise made to secure passage of ObamaCare: Respect the preferences of working people and their families. “If you like your health plan, you can keep your health plan, period,” President Obama told us. That promise was notoriously violated in practice, imposing on everyone the health insurance that Democrats insist they must have.

The Republican bill repeals many of the costly ObamaCare regulations driving up health insurance costs, and further grants power to states to waive the remainder. Even the CBO admits that this deregulation will ultimately reduce health insurance premiums, and that such premium reduction will ultimately diminish the number of uninsured.

But the CBO rejects Republican policies of choice and competition. What it embraces is outright coercion in the form of the individual and employer mandates. All of the unpopular negatives that the CBO projects from the Republican bill stem from this fundamental philosophical disagreement.

In its scores of both House Republican bills, the first that failed, and the second that passed, the CBO claims that the immediate effect will be to raise premiums, resulting from repeal of the individual mandate. The CBO insists that the first effect would be to encourage younger, healthier workers to drop coverage, causing costs for the remaining pool to rise. Yet the CBO confirms that the cost-reducing effects of deregulation would soon prevail, causing overall premiums to decline permanently and nationally.

But the CBO has no crystal ball predicting what will happen in the market. Most likely, insurers will see the long-run trend, and price their products to preempt any decline in the healthy insured, countering the CBO’s overwhelming bias in favor of coercive mandates.

Republican repeal of the unpopular, indeed unconstitutional, individual mandate is the driving force of the CBO’s contention that the uninsured will swell by millions under the Republican bill. The CBO said of its initial estimate that the uninsured will increase by 14 million in 2018, and “most of that increase will stem from repealing the penalties associated with the individual mandate.”

Using coercion to force Americans to purchase insurance contrary to their wishes is immoral and un-American, as confirmed by Congressional elections in 2010 and 2014, when voters liquidated Democrat Congressional majorities that obstinately supported ObamaCare.

The CBO consistently refuses to recognize the value of freedom of choice. Even when workers would use the Republican Universal Health Insurance Tax Credit to buy health insurance, the CBO admits that it does not count them as insured if it considers their chosen health insurance as insufficient.

“(P)eople who have only such policies are described as uninsured (in the CBO score) because they do not have financial protection from major medical risks,” the CBO openly acknowledges.

The CBO consequently confirms that its estimate of the “uninsured” includes Americans who are covered by health insurance that they have openly and freely chosen in the marketplace. Republican Congressional majorities need to respond that it is the CBO score of the uninsured that is not sufficient or accurate, by the CBO’s own admission.

The balance of the CBO’s increase in the uninsured arises from states that would reverse their Medicaid expansions. But it was on this very page on March 10, 2011, that now-FDA Chief Scott Gottlieb published, “Medicaid Is Worse Than No Coverage at All,” citing studies showing that health outcomes of those on Medicaid are no better than for the uninsured. Because Medicaid does not pay doctors and hospitals enough to ensure good health care for the poor, it is really an institutionalized means of denying health care for the poor.

Only through the Republican plan of block granting Medicaid to the states can the program be reformed to actually better serve the poor. Republicans should crave debating Democrats over which party can best salvage Medicaid.

Uhler is founder and chairman of the National Tax Limitation Committee and National Tax Limitation Foundation (NTLF).
Ferrara is a senior fellow with the Heartland Institute and NTLF. He served in the White House Office of Policy Development under President Reagan, and as associate deputy attorney general of the United States under President George H.W. Bush.

Comments are closed.