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Health Care / HEALTH CARE

CBO Score of Health Care Law Delivers No Big Wins

Journalists wait outside the Supreme Court for a landmark decision on health care on June 28.(AP Photo/Evan Vucci)

photo of Meghan McCarthy
July 24, 2012

If you pay attention to the press releases, the Congressional Budget Office’s new estimate of the health reform law is either proof that the health care law will reduce the deficit—or proof that it will increase the cost of health care. In other words, it’s the same health care debate politicians have been having since the Affordable Care Act passed in 2010.

The CBO offered a fresh analysis of the 10-year cost of the health care law on Tuesday in the wake of the Supreme Court's ruling that states could opt out of expanding Medicaid to low-income adult populations without losing all of their other federal Medicaid funds. The congressional analysts found that the health care law is $84 billion cheaper and that 4 million fewer Americans will get health insurance, as states opt not to expand their Medicaid programs.

They also found House Republican’s latest repeal bill would worsen the federal deficit by $109 billion over 10 years. That's an improvement over repeal legislation offered in 2011 that would have added $210 billion to the budget deficit over a decade. Even though insuring more Americans costs money, rolling back President Obama's landmark law would add to the deficit because the legislation includes cost-saving measures, such as a slowdown in the growth of payments to Medicare providers. Republicans did not try to offset the cost of either repeal bill.

 

While the reduced cost for the health care law's expanded Medicaid coverage offers Democrats the chance to highlight just how much their signature domestic-policy bill reduces the deficit, that victory is tempered by the fact that it comes at the cost of covering 4 million fewer people. And it’s not like the American people have ever fully grasped that the law was a big saver in the first place.

“People had no idea it saved any money. They were convinced it would cost more,” said Democratic pollster Celinda Lake. “It isn't like the cup is half empty. Real people had no idea there was anything in the cup!”

Democratic strategist Bob Shrum echoed those thoughts. The politics of the health care debate have been clearly defined since the law was being debated, and one CBO report is unlikely to change that.

“Substance hasn’t always mattered here. Death panels had a lot more currency than preexisting conditions for months until people started feeling the benefits of the law,” Shrum said. “I think Republicans were hoping they’d get a number that would show the law would be much more expensive, but I don’t think the number about the cost of repeal matters.… Republicans actually always pretend that it will save money.”

Senate Majority Leader Harry Reid, D-Nev., said that the report was “in keeping with what we’ve been saying,” that the law is “affordable.” But if there is any group of congressional staffers you can count on to give Democrats and Republicans a mixed bag of results, it’s the wonky, nonpartisan economists at the CBO.

“Politically, it’s a wash on both sides. From a public-policy perspective, it’s very complicated,” said Julius Hobson, a lobbyist for Polsinelli Shughart who used to head up the American Medical Association’s lobbying shop. “I just don’t know how either side can stand up and say, ‘We got everything we wanted.’ Just like in the Supreme Court decision, it didn’t work out that way.”

Republican staffer Chris Jacobs, who works for Sen. Jim DeMint, R-S.C., on the Joint Economic Committee, drilled down into the details of the numbers.

In one of his near-daily spin e-mails, Jacobs said there were "some interesting assumptions that are worth examining in greater detail." For example, the CBO said that just because the insurance coverage requirement was declared a tax would not make it less effective. In contrast, some conservatives think more people will be willing to forgo insurance if it is seen as simply paying a tax.

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