Got into a small but interesting back-and-forth on Twitter yesterday with Scott Paterno , son of JoePa and former Republican candidate to be my Congressman (the seat held, now and then, by Tim Holden).
It started when Paterno tweeted the following:
“This is scary. Remember CBO is non partisan. http://www.foxnews.com/politics/2012/03/14/cbo-health-law-estimate-shows-much-higher-spending-beyond-first-10-years/”
The linked-to story, from Fox News, claims that the new Congressional Budget Office study shows the impact of “Obamacare” on spending and the federal budget is much worse (that is, it’s going to cost much more) than originally thought.
This almost goes without saying since we’re talking about Fox News, but the CBO study doesn’t show that at all. It shows the opposite. So I tweeted back to Paterno:
“CBO actually says net cost of Obamacare is going to be less than orig. estimates. Fox news: an embarrassment, as usual”
This is where many of the less thoughtful among us would throw up their hands and say, “See, you can get numbers to tell you anything.”
But that would be bullshit. What Fox did was look at the raw costs of some parts of reform, which did go up for a number of reasons, one of which was that the number of uninsured elderly is greater than originally thought. But the CBO summary includes the following:
Gross Costs Are Higher, but Offsetting Budgetary Effects Are Also Higher
The current estimate of the gross costs of the coverage provisions—$1,496 billion through 2021—is about $50 billion higher than last year’s projection; however, the other budgetary effects of those provisions, which partially offset those gross costs, also have increased in CBO’s and JCT’s estimates—to $413 billion—leading to the small decrease in the net 10-year tally.
Over the 10-year period from 2012 through 2021, enactment of the coverage provisions of the ACA was projected last March to increase federal deficits by $1,131 billion, whereas the March 2012 estimate indicates that those provisions will increase deficits by $1,083 billion.
The net cost was boosted by:
- An additional $168 billion in estimated costs for Medicaid and CHIP, and
- $8 billion less in estimated revenues from the excise tax on certain high-premium health insurance plans.
But those increases were more than offset by a reduction of:
- $97 billion in the projected costs for the tax credits and other subsidies for health insurance provided through the exchanges and related spending
- $20 billion in the projected costs for tax credits for small employers, and
- $107 billion in deficits from the projected revenue effects of changes in taxable compensation and penalty payments and from other small changes in estimated spending.
Here’s what Fox did: If you look at the first paragraph, under the headline “Gross Costs are Higher….”, they counted the $50 billion figure but ignored the $413 billion figure.
So, to summarize the summary, “Gross costs are higher, but offsetting budgetary effects are also higher….. leading to a small decrease in the 10-year tally.”
Fox took the first four words of that last sentence, went nuts with them, and ignored the rest.
The question is, was this ignorance, or was it willful ignorance? I’m pretty sure you know the answer to that one.
Later Paterno tweeted:
“Look all – if you want universal healthcare that is fine. Just acknowledge its true cost. Honest, candid debate is core of the Republic.”
So is Fox News part of that problem or its solution? I’m pretty sure you know the answer to that one, too.
The point here is not at all to dump on Scott Paterno. Who isn’t less skeptical of analysis that confirms what we want to believe?
The point is to dump on a propaganda organization that pretends to be a news organization, hides behind the “liberal media” mythology, and insults the intelligence of everyone who has any.
By the way, if you’re into this wonky stuff, here’s another interesting aspect. From Avik Roy, in Forbes:
“One of the biggest concerns with the Affordable Care Act has been that the law will drive employers to stop sponsoring health insurance for their workers, instead dumping those workers on to the new law’s subsidized insurance exchanges. The Congressional Budget Office, in a provocative new report, believes that such behavior could, in some circumstances, actually reduce the deficit.”
Yes, another CBO report. The upshot is this: Starting in 2014, citizens will have the option of buying their health insurance from subsidized federal exchanges, either because their employee stopped providing insurance, or simply because another insurance is better.
In that case, what will employers do with the money they’ve saved? Some, but not nearly all, will go to pay a penalty for dumping. The rest could go to the dumped employee, in increased wages, or it could go into improving the business in some way, or it could go into the employers’ pocket.
Nobody knows, and without knowing it’s impossible to assess the budgetary impact. But no matter, it’s still money, isn’t it? It’s still the driver of growth. Hard to see it as a bad thing.
Roy, hardly a liberal, has a good analysis here.