Thursday, January 06, 2011

Wonder where the right-wing gets it's misinformation about the financial impact of repealing the Affordable Health Care Act? Try Tom Coburn.

Conservatives are claiming they can repeal the Affordable Care Act without increasing the budget deficit in the future. Many of them seem to believe this, or at least think they have support for this lie. Red State has published a propaganda piece which has come from Senator Tom Coburn. It will get rather wide distribution among the right wingers. It is, however, little more than word salad that makes no real sense.

Here is what Oklahoma Senator Tom Coburn has posted as an explanation for why the repeal of the PPACA (Patient Protection and Affordable Care Act) would lower the federal deficit:
Beyond the headlines, it’s important to look at what CBO actually said…..
  1. Repeal Reduces Health Insurance Costs for Americans. "In particular, if H.R. 2 was enacted, premiums for health insurance in the individual market would be somewhat lower than under current law…”
  2. Repeal Reduces Federal Spending on Health Care. “Last March, CBO estimated that enacting PPACA and the relevant provisions of the Reconciliation Act would increase the “federal budgetary commitment to health care” by about $400 billion over the 2010–2019 period; CBO uses that term to describe the sum of net federal outlays for health programs and tax preferences for health care.7 In contrast, CBO estimated that enacting that legislation would reduce the federal budgetary commitment to health care during the decade after 2019.”
  3. CBO Reviewed the Repeal Bill, But a Detailed Analysis is Still Forthcoming. “The Congressional Budget Office (CBO) has reviewed H.R. 2, the Repealing the Job-Killing Health Care Law Act, as introduced on January 5, 2011. That bill would repeal the Patient Protection and Affordable Care Act (PPACA, Public Law 111-148) and the provisions of the Health Care and Education Reconciliation Act of 2010 (P.L. 111-152) that are related to health care….. CBO has not yet developed a detailed estimate of the budgetary impact of repealing that legislation, although it is working with the staff of the Joint Committee on Taxation (JCT) to complete such an estimate in the near future. Because Congressional deliberations on H.R. 2 could begin very soon, CBO is providing in this letter a less-detailed preliminary analysis of that legislation.”
  4. The Promised Deficit Reduction From the Overhaul Has Changed Slightly. “The projected increase in deficits will not be exactly the same as the reduction in deficits that was originally estimated to result from the enacted legislation….[because] the economic outlook is now somewhat different…. Some of the funding provided by the legislation enacted last March has been obligated or spent… Subsequent legislation has already modified the laws enacted last March.”
  5. Now Repeal “Costs” $145 Billion. “CBO expects that enacting H.R. 2 would probably increase federal budget deficits over the 2012–2019 period by a total of roughly $145 billion..”
  6. But CBO Was Forced To Score the Initial Bill –Full of Smoke and Mirrors – as it Was Written. “As with all of CBO’s cost estimates, those estimates reflect an assumption that the provisions of current law would otherwise remain unchanged throughout the projection period and that the legislation being considered would be enacted and implemented in its current form. CBO’s responsibility to the Congress is to estimate the effects of proposals as written and not to forecast future legislation.”
  7. CBO Admits Actual Costs of the Overhaul Could Be Much Higher. “Projections of the bill’s budgetary impact are quite uncertain…..However, CBO’s staff, in consultation with outside experts, has devoted a great deal of care and effort to the analysis of health care legislation in the past few years, and the agency strives to develop estimates that are in the middle of the distribution of possible outcomes. As a result, CBO believes that its estimates of the net budgetary effects of health care legislation have a roughly equal chance of turning out to be too high or too low.”
  8. So, if the Current Law Were Changed Significantly (As Many Experts Anticipate), Repealing the Overhaul Could Reduce the Deficit.

    “The budgetary impact of repealing PPACA and the provisions of the Reconciliation Act related to health care could be quite different if key provisions of that original legislation would have subsequently been changed or not fully implemented….. Current law now includes a number of policies that might be difficult to sustain over a long period of time. For example, PPACA and the Reconciliation Act reduced payments to many Medicare providers relative to what the government would have paid under prior law. On the basis of those cuts in payment rates and the existing “sustainable growth rate” mechanism that governs Medicare’s payments to physicians, CBO projects that Medicare spending (per beneficiary, adjusted for overall inflation) will increase significantly more slowly during the next two decades than it has increased during the past two decades. If those provisions would have subsequently been modified or implemented incompletely, then the budgetary effects of repealing PPACA and the relevant provisions of the Reconciliation Act could be quite different—but CBO cannot forecast future changes in law or assume such changes in its estimates.”
[Note: I have changed the quote above to add numbers instead of dots. This permits me to analyze the document paragraph by paragraph below. ]

Here is my analysis of the word salad above.

Item 1. above states that the insurance companies will lower the price of health policies in the individual market if PPACA is repealed. No source is provided for this, but I am quite certain that Senator Coburn has a written promise from the insurance companies that they will lower prices. Yeah. Right.

Item 2. above is truly strange. Sen Coburn compares the CBO anticipated total federal outlays for health care during the period from 2010 - 2019 to the net federal outlays and tax preferences for an unknown period. Beyond being nonsense, this is at best an apples to oranges comparison. There is no "contrast" in the numbers for the third sentence to compare to. Besides, the third sentence is about the period after 2019. This three sentence paragraph is complete gibberish.

Item 3. above complains that the CBO detailed analysis on the proposed H.R. 2 repeal of the Affordable Care Act was not complete and final prior to the Republican House even considering the bill. Well, Duh! There has not been any proposed H.R. 2 before today. There is no telling what will happen to it in Congress. This paragraph is another space filler with no information in it. It is meaningless word salad.

Item 4. above states that the conditions under which the CBO estimate of the costs of the AHCA they presented in March may be slightly different today because some conditions have changed since then. In other words, today is not exactly the same as last March was. There is, of course, no indication that the changes since they are in fact significant. Again, this is a filler paragraph designed to look like something was actually being said. It is more meaningless word salad.

Items 5 and 6 above need to be considered together. First item 5. points out that where ever the Coburn people got their numbers the cost of repeal would be $145 billion between 2012 and 2019. This number is the center of the entire document Coburn is trying to wish away. According to TPM this number itself is sharply low-balled from the current $230 billion over the same period of time.
Today, CBO forecast that the 10-year cost of repealing health care reform is actually $230 billion. That's nearly $100 billion higher than one might have expected, given that just under a year ago, the same budget analysts concluded that the Affordable Care Act would reduce the deficit by $143 billion in the first decade.
Item 6 above tries to justify the quotation marks that Coburn put around the "Costs" before he stated $140 billion. The excuse? The CBO estimate from last March was based only on the way the bill that was passed as of the time of the estimate, March 2010. Therefore it was purely smoke and mirrors. It does not estimate changes that Congress might make to the bill. Yep. Word salad again.

Item 7 above pulls out the statement that any honest analyst making a prediction of future costs is going to have to make. "Projections of the bill's budgetary impact are quite uncertain ....." but they developed a best case scenario, a worst case scenario and a most likely scenario and this was the most likely. Gee. Yogi Berri is alleged to have said It's tough to make predictions, especially about the future. So somehow this crap published by Tom Coburn is supposed to be as reliable as the best estimates of the CBO? Just like everything above except paragraph 5 which presents a sharply low-balled cost figure, this paragraph is more crap word filler with no real meaning.

Item 8 above suggests that if the Affordable Care Act were repealed significantly and then repealed, repealing the overhaul might reduce the deficit. So if unspecified changes are made in the law and then it is repealed, there might be reductions in the deficit.

Yeah, right, and if I buy a lottery ticket tonight and it happens to win next Saturday, then I just might possibly become a wealthy man. This paragraph is yet more crap word filler - but less likely than my suddenly coming into lottery wealth.

Essentially Senator Coburn has explained why the ACA can be repealed without increasing the deficit by placing a low-balled CBO estimate of how much CBO said months ago it would cost to repeal the act between seven paragraphs of gibberish and irrelevancies to try to hide the low-balled figure. It's not even good propaganda. But RedState published it.

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