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How Accurate Is The CBO’s 75-Year Cost Projection?

The Congressional Budget Office released two separate 75-year spending projections this morning. One estimated what would happen under current law; the other predicted what the deficit would look like if Congress patched the doc fix, ignored the cost controls in the health care law and extended the Bush tax cuts:

cbo75yr

The cynic in me believes that the bottom graph is probably more accurate than the top graph , but even that does not take into account all the possible changes — at least when it comes to the health care law. The problem is that CBO doesn’t score things like prevention and payment reform and relies on a narrow spectrum of evidence to estimate the costs and savings. This kind of math has gotten the agency in trouble before. For instance, CBO has consistently underestimated the savings from Medicare hospital payments in the early 1980s, (which ended up saving more in just one year than CBO predicted for three years) and the Medicare Part D legislation. In this report, it notes that “A wide range of changes could occur—in people’s health, in the sources and extent of their insurance coverage, and in the delivery of medical care—that are almost impossible to predict but that could have a significant effect on federal health care spending, both under the legislation and under prior law.”

Indeed, there is a whole body of research that quantifies the savings from the provisions that the CBO largely ignores. In May, the Commonwealth Fund and the Center for American Progress Action Fund released a study that relied on business literature about the inefficiency in the health care sector, experiences of health practitioners, and the real world experiences of Geisinger Health System, Health Partners, Denver Health and others and estimated higher savings from modernization and payment reform. As a result, they found that the annual growth rate in national health expenditures falls from 6.3 percent absent reform to 5.7 percent under the health law. Similarly, the administration’s Council of Economic Advisers also released a report last year which found that health reform would reduce health care spending by 1 “percentage point over an extended horizon.”

The point of this is to say that the 75-year estimate is a rough guesstimate that’s based on a very specific and narrow interpretation of data. It should be seen as such.

Increasing Number of Americans Have Favorable View Of Health Law, Just 27% Want Immediate Repeal

A new Kaiser Health News poll is at least the third survey to show that approval for health care reform is increasing, despite the GOP’s continued effort to paint the law as a failure. The new results show that “48% of the public had a favorable view of the law in June while 41% had an unfavorable opinion. A month earlier, the split was 41% favorable to 44% unfavorable”:

KaiserPollFavor

Moreover, just 27% of Americans want to repeal the law entirely and 12% of those who have an unfavorable impression said that the “law should be given a chance to work, with Congress making necessary changes along the way.” For all of the noise we’re hearing about repealing the law and the health care lawsuits, these aren’t very impressive numbers. On the whole, most Americans believe that the law will have a neutral impact but think that the country as a whole would be better off.

I’ve argued before that reform will need to deliver some early benefits to truly turn the numbers around and this poll suggests that it’s unclear if anyone is paying any attention to all the discussion about pending benefits (from the GOP and the administration). For instance, the number of individuals who recognize some of the oft-talked about provisions like extending dependent coverage until age 26, and the individual mandate actually decreased. The number who know about the high risk pools for individuals with pre‐existing conditions increased by just one percentage point.

Despite Pledging To Preserve Law’s Popular Provisions, GOP Leaders Plan To Repeal Entire Health Law

091014_boehner_cantor_reuters_392Earlier today, in an effort to placate party conservatives, House Minority Leader John Boehner (R-OH) and House Minority Whip Eric Cantor (R-VA) signed onto two discharge petitions offered by Reps. Steve King (R-IA) and Wally Herger (R-CA). The petitions will need to attract 218 members to force the House to take up repeal legislation that would eliminate the entirety of the health law. Herger’s measure would also replace the law with “common-sense reforms.”

The move is a significant departure for the Republican leaders who have previously claimed that they would like to preserve the more popular elements of health care reform and repeal “the other” mandates. For instance, back in January, Cantor told Politico’s Mike Allen that Republicans “WILL NOT campaign for full health care repeal, but will demand partial repeal, including mandates for health coverage.” Boehner sang a similar tune as recently as April:

BOEHNER: Both of those ideas [ending rescission and extending dependent coverage], by the way, came from Republicans, and are part of the common sense ideas that we ought to have in the law.

INSKEEP: Well, are you going to repeal those two specific things?

BOEHNER Uh, what I want to repeal are the other 158 mandates, commissions, boards that set up all the infrastructure for the government to take control of our health care system.

Boehner’s and Cantor’s new position represents a significant victory for conservative activists like King, who have complained about the leadership’s reluctance to support full repeal, but some grassroots activist are still not pleased. Red States’ Eric Ericson complains that Boehner and Cantor “want to bully Republican House members into signing the Herger petition and undercut the repeal effort with a “replace and replace with lame legislation” effort. In effect, this undercuts a unified repeal effort and muddies the waters.”

But the leadership’s endorsement of the discharge petition also pits the GOP against popular provisions like access to insurance for people with pre-existing conditions and dependent coverage and may create more divisions within the caucus. Back in March, Rep. Phil Gingrey said, “When we say start over, we don’t mean throw everything out – throw out the baby with the bath water. We mean, take the best of this bill and combine it with our ideas.” In April, Rep. Jack Kingston (R-GA) told a town hall meeting, “there are a lot of things in this bill I think you and I certainly like.” “I think as a practicality you’re going to have trouble repealing the whole deal,” Kingsdale said. “But there ought to be areas where Democrats and Republicans can come together.”

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