Don't Believe CBO Health Care Cost Estimate

Just a short one today. By now you’ve all heard that the CBO scored the Democratic “Baucus” health care bill favorably at $829 billion -- just below the original $900 billion “expected price tag.” You’ve also probably heard that the bill will not increase the deficit one penny. Thus, trumpet the Obamacrats and their fellow travelers in the media. Don’t believe it.

The CBO scoring process is not what you think, nor is it what the Obamacrats are portraying. They want you to believe that the CBO independently evaluated the bill and determined its likely price tag to be “only” $829 billion over ten years. But that’s not how scoring works.

The CBO does not do independent work. When Congress presents the CBO with a bill, the Congress also includes a list of assumptions. In this instance, for example, those assumptions include expected tax increases, magic cost savings from improved health, and spending cuts that will never happen -- unless you believe they really are going to cut Medicare payments in half.

The CBO does not determine whether or not the tax increases, spending cuts or cost savings are real. It just plugs them into its scoring model and spits out a total cost for the bill. Thus, while the score may be accurate for what is presented, the real question is how accurate are the assumptions. In programming speak, this is called garbage in, garbage out.

Think of it this way. If a dieter says that they will eat 10 cakes a day for the next three days, but will then reduce their calories below starvation levels for the next month to burn off those cakes, does any rational person believe that the dieter will be able to complete that diet? Of course not. Yet, if the CBO scored this plan, it would simply accept the assumptions and would conclude that this diet indeed balances out perfectly. Welcome to government reality.

However, there actually is a reason to believe that the bill might be as “cheap” as advertised: it doesn’t cover anyone.

From the Obamacrats themselves, even if the bill works as planned, it will only reduce the number of people without insurance from 46 million to 25 million. . . and it takes until 2019 to do this!

Thus, looking at the ten year budget, the only year that really bears the full cost of the program is the final year. Thus, it's 20 year cost will be many times its 10 year cost, not just double. Moreover, another 21 million Americans will remain uninsured. Further, of the 25 million covered, most will become covered because they will be forced to buying their own insurance (under threat of a $1,900 fine and jail (with a $25,000 fine)).

The Democrats note that this could be a hardship on many people: “For some people it's going to be a heavy lift,” said Sen. Tom Carper, D-Del. But then who cares when you have a legacy to put into law.