The CBO Scores the American Health Care Act (AHCA, or Is It RyanCare or ObamaCare 2.0?)


This week’s health policy news roundup curated by Jane Orient, M.D.

The Congressional Budget Office (CBO) has a reputation for competence and honesty, though not for correct forecasting. It is constrained by the information given, and by its assumptions. Its scoring of AHCA shows that it, like most commentators and politicians, is focused on coverage, not care.

In January, CBO scored the repeal bill passed by Congress but vetoed by then-President Obama. It estimated that the repeal would increase the number of people without insurance by 18 million in 2018, 27 million in 2020, and 32 million in 2026. Furthermore, CBO stated that premiums would increase “by 20 to 25 percent” in 2018, and “about double by 2026.”

Avik Roy pointed out that CBO has massively overestimated the impact of the individual mandate for years. It even  estimated that “5 million fewer people” would have Medicaid coverage as a result of the mandate’s repeal—although most individuals with incomes low enough to qualify for Medicaid are exempt from the individual mandate (Forbes, Jan 17, 2017,

CBO has now scored the Ryan partial repeal/partial replace proposal, the American Heath Care Act (AHCA).

The mainstream media lead is that the bill would “drop” some 24 million Americans off their health insurance, including 14 million in its first year. What this really means is that absent the tax penalty for not buying, 14 million Americans will reject ObamaCare plans. Or as Scott McKay put it, “the CBO just admitted some 14 million Americans are being forced to buy crappy, overpriced health insurance because of a tyrannical, un-American nanny state overreach which is unsustainable in a free society.”

McKay also notes that Medicaid is free: Why would 5 million people prefer being uninsured to having free coverage? Medicaid is just an “illusion of insurance,” he states.

Avik Roy doubts CBO’s view that repeal of the individual mandate will cause millions to drop Medicaid, citing its very spotty enforcement, especially in low-income brackets. “Still, it’s remarkable that the CBO believes people need to be fined into signing up for Medicaid. That tells us something about the CBO’s assessment of Medicaid’s value to those individuals.” (Wall Street Journal, Mar 14, 2017, [Could it be that Medicaid is of much greater value to the managed-care cartel than to patients? –Ed.]

Looking from the perspective of not repealing the Affordable Care Act (ACA or “ObamaCare”), Doug Badger states that millions will lose coverage next year if ACA is left intact. “But for CBO, Obamacare is a sea of tranquility.”

“A rational observer might worry that the exchanges were on the brink of doom,” Badger writes. “Not CBO. Its analysts believe that Obamacare is on the cusp of a miracle. The number of nonelderly uninsured not only will drop this year but hold steady in 2018, according to CBO, even though millions could find themselves without an insurer in their exchanges.”

“If CBO is correct, the government will have spent $462 billion between 2014 and 2018 on subsidies and Medicaid expansions, only to end up reducing the number of nonelderly uninsured from 44.3 million to 41 million,” he adds [$140,000 each].

“Congress should set policy based on reality, not on CBO’s speculations,” he concludes.

McKay concludes that the whole program is a mistake: “The GOP leadership needs to pay heed to what Donald Trump has been telling them. Trump has said time and time again the best political move Republicans in Congress can make is nothing. Obamacare is collapsing; let it collapse and, once it does, it will take the Democrat party down with it.”

Rather than a comprehensive reform, he suggests creating some cracks in Obamacare. Then “the market could seep through and save the entire health care sector when the status quo crumbles to dust in a year or two.” He states: “Government can’t fix the insurance market; all government can do is destroy it. It so happens that’s what the Democrats are counting on. Obamacare was designed to collapse into single-payer socialized medicine, so they’re going to do everything they can to resist efforts to alter the current trajectory.” (McKay, op. cit.)


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