“Coverage is not the end,” Mick Mulvaney told Morning Joe’s audience earlier today in pushing back against yesterday’s CBO report. “People don’t get better with coverage. They get better with care.” The OMB director faced off against a skeptical panel of Mika Brzezinski, Kasie Hunt, and Mark Halperin to explain that the CBO score on coverage is not only unreliable, but misses the point (via Politico):
“I don’t believe the facts are correct,” Mulvaney said on MSNBC’s “Morning Joe” when asked for his take on the CBO report. “I’m not just saying that because it looks bad for my political position. I’m say that based upon a track record of the CBO being wrong before and we believe the CBO is wrong now.” …
As an example of the CBO’s inability to forecast the insurance market, Mulvaney noted that it had missed badly on Obamacare enrollment predictions for this year, suggesting in a report released three years ago that 24 million people would use the law’s exchanges to purchase healthcare. In reality, Mulvaney said, that number is closer to 11.5 million.
“It’s really, really hard to do this. We don’t even try to do this at the OMB. That’s how difficult it is,” Mulvaney said. “CBO: Good at counting money, in and out, numbers, taxes, policies and so forth. Not so sure that they’re the best folks to count insurance coverage.”
Mulvaney’s mainly correct when it comes to the private market. Many of the 24 million added to the ranks of the uninsured by 2020 will choose to go there, thanks to high premiums and sky-high deductibles in the short term as the hangover of ObamaCare slowly wears off. Most of those didn’t need comprehensive coverage in the first place, and certainly not at the astronomical prices being charged under the ACA’s community-rating mandate. For most of those who purchased insurance through the exchanges even with tax subsidies, the average $6000 individual deductible meant that their benefits never kicked in anyway, so they were already paying retail for care. That is what Mulvaney means when he says that the CBO’s “facts” aren’t “correct.”
Furthermore, those numbers will begin to decline by 2020 for two reasons. The first is that premiums will be determined through the normal risk-pool calculations that ObamaCare barred, including age, a move that will remove the burden from younger and healthier consumers. The second is that health insurers will be allowed to innovate, offering coverage tailored to suit consumers rather than being forced into a one-size-fits-all comprehensive-care mandate. Those two developments will encourage younger and healthier Americans to insure themselves against catastrophic events and allow insurers to dramatically lower deductibles on all other policies.
However, Hunt is also correct that the majority of the newly uninsured will come from Medicaid rollbacks by 2026, as the CBO report notes. States could choose to keep the ACA expansion in place after the federal government reduces the reimbursement rates for expansion of 90% to the normal level of 57%, but the CBO report assumes — rationally and almost certainly correctly — that they mostly will not do so. One can debate whether Medicaid allows people to get meaningful care, but for the poor and those close to that line, they don’t usually have the resources to get it any other way either.
That is the political problem facing Republicans with the AHCA, made worse by promises from Donald Trump and more recently Tom Price that no one would be worse off under the new plan. It’s a problem that will get worse if House conservatives succeed in accelerating the Medicaid rollback. It’s why the GOP’s best bet was to win in 2012 and repeal ObamaCare with Mitt Romney in the White House, before this entitlement expansion got well and truly under way. Now circumstances dictate that benefits that had been already provided be clawed back from millions of Americans, and even if that makes a lot of fiscal sense, it’s political dynamite. Will Republicans go along with the AHCA and risk that backlash and trust that a third “phase” of legislation will pass to alleviate this issue? Let’s just say that the White House will need to be whipping this one hard to get it across the finish line.