Fuzzy Math from CAP on Costs and Premiums
The Center for American Progress is releasing a new report at 12:30 this afternoon on the health care law, and the impact of repeal, that merits a “pre-buttal” on several points.
First, the study’s author, David Cutler, has a history of questionable claims regarding the impact of health “reform” on reducing premiums and costs. Cutler was the same Obama campaign adviser who co-wrote the famous memo attempting to defend candidate Obama’s assertion that his health plan would save families $2,500 per year on premium costs – a total savings of $200 billion per year, or $2 trillion over ten years. Yet last May, Cutler co-authored a follow-up report released by the Center for American Progress and the Commonwealth Fund stating that health “reform” would yield only $590 billion in savings over the next decade. So Cutler and others on the left trying to defend this latest study should first explain why the estimated savings from health care reform declined by more than 70 percent – did the final law not include strong enough mechanisms to contain costs, or did Cutler inflate his campaign-era estimates of potential savings for political purposes, and is he doing the exact same thing now?
Additionally, today’s report includes a VERY selective quoting of facts on costs and premium impacts:
- The study premises its findings on the assumption that the health care law will contain costs, but admits that “the Congressional Budget Office, or CBO, and the Office of the Actuary at CMS assume only minor savings” from the law. (For the record, the CMS actuary has stated that the law will RAISE costs by $310,800,000,000 in its first decade alone; this inconvenient truth is somehow omitted from the report, which claims instead that “repealing the law would increase medical spending.”)
- Using the same flawed assumptions, the study claims that repealing the law would lead to premium increases, ignoring the CBO’s conclusion that passing the law in the first place will raise individual market insurance premiums by an average of $2,100 per family.
- The report claims that repealing the health care law will lead to job losses, but ignores the CBO’s conclusion that the economy will lose an estimated 750,000 jobs because the perverse incentives included in the health care law will discourage individuals from working. The CBO found that the law “will encourage some people to work fewer hours or to withdraw from the labor market,” and that “on net, [the law] will reduce the amount of labor used in the economy.” (For more info, see a previous analysis on this issue available here.)
In other words, at a time when the left is invoking CBO to claim that repealing the law will raise the deficit, these same liberal organizations are ignoring the analysis of the non-partisan CBO and Medicare actuary that the law will RAISE costs, RAISE premiums, and LOWER the number of American jobs. Got all that?
Republicans have been clear about where the fault in the scoring process lies – not with CBO officials, but with the Democratic majority, which forced CBO to score the bill using phony budgetary assumptions to claim the law reduces the deficit. (Or, as former CBO director Doug Holtz-Eakin described it more bluntly, “Garbage in, garbage out.”) The bigger question is what Democrats believe in regarding the law’s impact – do they believe ALL of CBO’s analyses, or just those portions they find politically convenient?